Macy's Inc. DEF 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
o Preliminary Proxy Statement
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Pursuant to §240.14a-12
Macys
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 the appropriate box):
þ No fee required
o Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and
state how it was determined: |
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o Fee paid previously with preliminary materials
o Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and
identify the filing for which the offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the date of its filing.
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Date Filed: |
MACYS, INC.
7 West Seventh Street Cincinnati, Ohio 45202
and
151 West 34th Street New York, New York 10001
April 1,
2008
To the Stockholders:
It is my privilege to invite you to attend Macys 2007
annual meeting of stockholders. We are holding the annual
meeting on Friday, May 16, 2008, at 11:00 a.m.,
Eastern Daylight Savings Time, at Macys offices located at
7 West Seventh Street, Cincinnati, Ohio 45202. We are
enclosing the official notice of meeting, proxy statement and
form of proxy with this letter. The matters listed in the notice
of meeting are described in the attached proxy statement.
Your vote is important. Accordingly, we encourage you to read
the proxy statement and cast your vote promptly by following the
instructions on the enclosed proxy card.
Thank you for your cooperation and support of Macys.
Sincerely,
Terry J. Lundgren
Chairman of the Board, President
and Chief Executive Officer
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING,
PLEASE CAST YOUR VOTE PROMPTLY
BY FOLLOWING THE INSTRUCTIONS ON THE ENCLOSED PROXY CARD.
MACYS, INC.
7 West Seventh Street, Cincinnati, Ohio 45202
and
151 West 34th Street, New York, New York 10001
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
and
Important Notice Regarding the Availability of Proxy
Materials
For the Shareholder Meeting to be Held on May 16,
2008
To the Stockholders:
Macys hereby gives notice that the annual meeting of its
stockholders will be held at 11:00 a.m., Eastern Daylight
Savings Time, on Friday, May 16, 2008, at Macys offices
located at 7 West Seventh Street, Cincinnati, Ohio 45202.
The items on the agenda for the annual meeting are:
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1.
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To elect eleven members of Macys board of directors;
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2.
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To ratify the appointment of KPMG LLP as Macys independent
registered public accounting firm for the fiscal year ending
January 31, 2009; and
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3.
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To act upon such other business as may properly come before the
annual meeting or any postponements or adjournments thereof.
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We recommend that you vote For the election of each
director nominee and For item 2. Each of these
matters is more fully described in the attached proxy statement.
The proxy statement and our annual report on
Form 10-K
are also available for your review at: www.proxyvote.com and
www.macysinc.com/shareholders.
The Board of Directors has fixed March 21, 2008 as the
record date for the determination of stockholders entitled to
vote at the annual meeting or any postponements or adjournments
of the annual meeting.
Dennis J. Broderick
Secretary
April 1, 2008
YOU MAY VOTE IN PERSON AT THE ANNUAL MEETING OR BY PROXY.
MACYS RECOMMENDS THAT YOU VOTE BY PROXY EVEN IF YOU PLAN
TO ATTEND THE ANNUAL MEETING. PLEASE VOTE BY FOLLOWING THE
INSTRUCTIONS ON THE ENCLOSED PROXY CARD. YOU MAY VOTE BY MAIL,
BY TELEPHONE OR OVER THE INTERNET. IF YOU CHOOSE TO VOTE BY
MAIL, PLEASE COMPLETE THE PROXY CARD AND RETURN IT PROMPTLY IN
THE ENCLOSED POSTAGE-PAID ENVELOPE. IF YOUR SHARES ARE HELD IN
STREET NAME BY A BROKER, BANK OR OTHER NOMINEE, AND YOU DECIDE
TO ATTEND AND VOTE YOUR SHARES AT THE ANNUAL MEETING, YOU MUST
FIRST OBTAIN A SIGNED AND PROPERLY EXECUTED PROXY FROM YOUR
BANK, BROKER OR OTHER NOMINEE TO VOTE YOUR SHARES HELD IN STREET
NAME AT THE ANNUAL MEETING.
MACYS, INC.
7 West Seventh Street, Cincinnati, Ohio 45202
and
151 West 34th Street, New York, New York 10001
PROXY
STATEMENT
Macys board of directors (the Board) is
furnishing this proxy statement in connection with its
solicitation of proxies for use at the annual meeting of
Macys stockholders. The annual meeting will be held at
11:00 a.m., Eastern Daylight Savings Time, on Friday,
May 16, 2008, at Macys offices located at
7 West Seventh Street, Cincinnati, Ohio 45202. The
proxies received will be used at the annual meeting and at any
postponement or adjournment of the annual meeting for the
purposes set forth in the accompanying notice of meeting. We
will begin mailing the proxy statement, the notice of meeting
and accompanying proxy on April 17, 2008.
Except where the context requires otherwise, the term
Macys includes Macys, Inc. and its
subsidiaries. Share and per share amounts in this proxy
statement are adjusted to reflect a two-for-one stock split
effected as a stock dividend on June 9, 2006.
TABLE OF
CONTENTS
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2
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4
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8
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22
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23
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46
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48
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69
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69
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69
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70
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71
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72
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POLICY AND PROCEDURES FOR PRE-APPROVAL OF NON-AUDIT SERVICES BY
OUTSIDE AUDITORS
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A-1
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1
GENERAL
The record date for the annual meeting is March 21, 2008.
If you are a holder of record of shares of Macys common
stock at the close of business on the record date you are
entitled to vote those shares at the annual meeting. You are
entitled to one vote for each share of common stock you own on
each of the matters listed in the notice of meeting. As of the
record date, 421,356,181 shares of common stock were
outstanding. This number excludes shares held in the treasury of
Macys.
The Board has adopted a policy under which all voting materials
that identify the votes of specific stockholders will be kept
confidential and will not be disclosed to Macys officers,
directors or employees or to third parties except as described
below. Voting materials may be disclosed in any of the following
circumstances:
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if required by applicable law;
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to persons engaged in the receipt, counting, tabulation or
solicitation of proxies who have agreed to maintain stockholder
confidentiality as provided in the policy;
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in those instances in which stockholders write comments on their
proxy cards or otherwise consent to the disclosure of their vote
to Macys management;
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in the event of a proxy contest or a solicitation of proxies in
opposition to the voting recommendations of the Board;
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in respect of a stockholder proposal that Macys Nominating
and Corporate Governance Committee of the Board, referred to as
the NCG Committee, after having allowed the proponent of the
proposal an opportunity to present its views, determines is not
in the best interests of Macys and its
stockholders; and
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in the event that representatives of Macys determine in
good faith that a bona fide dispute exists as to the
authenticity or tabulation of voting materials.
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The policy described above will apply to the annual meeting.
A quorum of stockholders is necessary to hold a valid annual
meeting. The holders of a majority of the stock issued and
outstanding and entitled to vote at the annual meeting, present
in person or represented by proxy, will constitute a quorum at
the annual meeting for the transaction of business at the
meeting. Macys will treat all shares of Macys common
stock represented at the meeting, including abstentions and
broker non-votes, as shares that are present and
entitled to vote for purposes of determining the presence of a
quorum. Macys will treat abstentions and broker non-votes
as shares not voted for purposes of determining whether the
requisite vote on a matter has been obtained. In order to obtain
approval of any matter, the affirmative vote of the holders of a
majority (or, in the case of the election of any nominee as a
director, a plurality) of the shares of common stock represented
at the annual meeting and actually voted is required.
Consequently, abstentions and broker non-votes will have no
effect on the outcome of the vote on any such matter. If the
persons present or represented by proxy at the annual meeting
constitute the holders of less than a majority of the
outstanding shares of common stock as of the record date, the
annual meeting may be adjourned to a subsequent date for the
purpose of obtaining a quorum. Broker non-votes are
shares held by a broker, bank or other nominee that are
represented at the meeting, but with respect to which the
beneficial owner of such shares has not instructed the broker,
bank or nominee on how to vote on a particular proposal, and
with respect to which the broker, bank or nominee does not have
discretionary voting power on such proposal.
2
All shares of common stock represented at the annual meeting by
proxies properly submitted prior to or at the annual meeting
will be voted at the annual meeting in accordance with the
instructions on the proxies, unless such proxies previously have
been revoked. If no instructions are indicated, such shares will
be voted:
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FOR the director nominees identified below; and
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FOR the ratification of the appointment of Macys
independent registered public accounting firm.
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You may vote in person at the annual meeting or by proxy.
Macys recommends that you vote by proxy even if you plan
to attend the annual meeting. You have three options for voting
by proxy:
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Internet: You can vote over the Internet at
the Web address shown on your proxy card. Internet voting is
available 24 hours a day, seven days a week. When you vote
over the Internet, you should not return your proxy card.
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Telephone: You can vote by telephone by
calling the toll-free number on your proxy card. Telephone
voting is available 24 hours a day, seven days a week.
Easy-to-follow voice prompts allow you to vote your shares and
confirm that your instructions have been properly recorded. When
you vote by telephone, you should not return your proxy card.
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Mail: You can vote by mail by simply signing,
dating and mailing your proxy card in the postage-paid envelope
included with this proxy statement.
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A number of banks and brokerage firms participate in a program
that also permits stockholders whose shares are held in street
name to direct their vote over the Internet or by telephone. If
your bank or brokerage firm gives you this opportunity, the
voting instructions from the bank or brokerage firm that
accompany this proxy statement will tell you how to use the
Internet or telephone to direct the vote of shares held in your
account. The Internet and telephone proxy procedures are
designed to authenticate your identity, to allow you to give
your proxy voting instructions and to confirm that those
instructions have been properly recorded. Votes directed over
the Internet or by telephone through such a program must be
received by 5:00 p.m., Eastern Daylight Savings Time, on
Thursday, May 15, 2008. Requesting a proxy prior to the
deadline described above will automatically cancel any voting
directions you have previously given over the Internet or by
telephone with respect to your shares. Directing the voting of
your shares will not affect your right to vote in person if you
decide to attend the annual meeting; however, you must first
obtain a signed and properly executed proxy from your bank,
broker or other nominee to vote your shares held in street name
at the annual meeting.
If you participate in Macys Profit Sharing 401(k)
Investment Plan or The May Department Stores Companys
(May) Profit Sharing Plan, you will receive a voting
instruction card for the Macys common stock allocated to
your account in the applicable plan. You may instruct the plan
trustee on how to vote your proportional interest in any
Macys shares held by the plan by signing, dating and
mailing the enclosed voting instruction card, or by submitting
your voting instructions by telephone or over the Internet. The
applicable plan trustee will vote your proportional interest in
accordance with your instructions and the terms of the plan. If
you fail to vote, the trustee for the applicable plan, subject
to its fiduciary obligations under ERISA, will vote your
proportional interest in the same proportion as it votes the
proportional interests for which it receives instructions from
other plan participants. Under the terms of the two plans, the
trustees must receive voting instructions from plan participants
by 5:00 p.m., Eastern Daylight Savings Time, on Wednesday,
May 14, 2008.
3
You may revoke your proxy at any time by:
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submitting evidence of your revocation to the Corporate
Secretary of Macys;
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voting again over the Internet or by telephone;
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signing another proxy card bearing a later date and mailing it
so that it is received prior to the annual meeting; or
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voting in person at the annual meeting, although attendance at
the annual meeting will not, in itself, revoke a proxy.
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STOCK
OWNERSHIP
Certain Beneficial Owners. The following table
sets forth information as to the beneficial ownership of each
person known to Macys to own more than 5% of Macys
outstanding common stock as of December 31, 2007.
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Most Recent
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Number of
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Percent of
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Name and Address
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Schedule 13G
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Shares
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Class
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AXA Financial, Inc. (AXA Financial)
1290 Avenue of the Americas
New York, NY 10104(1)
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February 14, 2008
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63,506,255
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14.7
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%
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Massachusetts Financial Services Company (MFS)
500 Boylston Street
Boston, MA 02116(2)
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February 12, 2008
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23,074,534
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5.3
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%
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(1) |
Based on a Schedule 13G filed with the SEC on
February 14, 2008 by AXA Financial; AXA, which owns AXA
Financial; and AXA Assurances I.A.R.D. Mutuelle
(IARD), AXA Assurances Vie Mutuelle
(Vie) and AXA Courtage Assurance Mutuelle
(collectively with IARD and Vie, the Mutuelles AXA),
as members of a group which controls AXA. The address of the
Mutuelles AXA is 26, rue Drouot, 75009
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Paris, France. The address of AXA is 25, avenue Matignon, 75008
Paris, France. The Schedule 13G reports the ownership as
follows:
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Deemed to
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Deemed to
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Deemed to
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Deemed to
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have Sole
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have Shared
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have Sole
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have Shared
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Power to
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Power to
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Power to
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Power to
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Vote or to
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Vote or to
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Dispose or to
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Dispose or to
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Direct the
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Direct the
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Direct the
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Direct the
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Vote
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Vote
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Disposition
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Disposition
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The Mutelles AXA, as a group
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0
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0
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0
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0
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AXA
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0
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0
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0
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0
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AXA Entity or Entities:
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AXA Investment Managers Paris
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7,607
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0
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7,607
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0
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AXA Konzern AG (Germany)
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900
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0
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900
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0
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AXA Rosenberg Investment Management LLC
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9,100
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0
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16,100
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0
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AXA Financial
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0
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0
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0
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0
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Subsidiaries of AXA Financial:
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Alliance Bernstein L.P.
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46,971,554
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7,690,109
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63,471,425
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107
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AXA Equitable Life Insurance Company
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9,900
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0
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10,116
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0
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46,999,061
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7,690,109
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63,506,148
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107
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(2) |
According to the MFS Schedule 13G, MFS has the sole power
to vote 20,355,944 shares and the sole power to dispose of
23,074,534 shares beneficially owned by MFS
and/or
certain other non-reporting entities.
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5
Stock Ownership of Directors and Executive
Officers. The following table sets forth the
shares of common stock beneficially owned (or deemed to be
beneficially owned pursuant to the rules of the Securities and
Exchange Commission, referred to as the SEC), as of
March 21, 2008 by each Macys director who is not an
employee of Macys, referred to as a Non-Employee Director,
by each executive named on the 2007 Summary Compensation Table,
referred to as a Named Executive, and by Macys directors
and executive officers as a group. The business address of each
of the individuals named in the table is 7 West Seventh
Street, Cincinnati, Ohio 45202.
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Number of Shares
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Percent of
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Name
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(2)
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Class
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Stephen F. Bollenbach
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5,000
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0
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less than 1
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%
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Deirdre P. Connelly
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0
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0
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less than 1
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%
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Meyer Feldberg
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86,166
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71,000
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less than 1
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%
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Sara Levinson
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74,122
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71,000
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less than 1
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%
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Joseph Neubauer
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136,040
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71,000
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less than 1
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%
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Joseph A. Pichler
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78,800
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71,000
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less than 1
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%
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Joyce M. Roché
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9,492
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7,500
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less than 1
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%
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Karl M. von der Heyden
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90,844
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71,000
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less than 1
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%
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Craig E. Weatherup
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77,000
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71,000
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less than 1
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%
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Marna C. Whittington
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96,126
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71,000
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less than 1
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%
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Terry J. Lundgren
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2,922,411
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2,716,652
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less than 1
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%
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Karen M. Hoguet
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632,116
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538,585
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less than 1
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%
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Thomas L. Cole
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492,701
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413,527
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less than 1
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%
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Janet E. Grove
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537,712
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479,945
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less than 1
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%
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Susan D. Kronick
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674,114
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589,329
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less than 1
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%
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All directors and executive officers as a group (18 persons)
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5,967,336
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5,383,394
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1.6
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%
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(1) |
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Aggregate number of shares of common stock currently held or
which may be acquired within 60 days after March 21,
2008 through the exercise of options granted under Macys
1995 Executive Equity Incentive Plan, referred to as the 1995
Equity Plan. Includes shares pledged as security in brokerage
firm customary margin accounts, as follows: Whittington,
17,314 shares. |
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(2) |
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Number of shares of common stock which may be acquired within
60 days after March 21, 2008 through the exercise of
options granted under the 1995 Equity Plan. |
6
Securities Authorized for Issuance Under Equity Compensation
Plans. The following table presents certain
aggregate information, as of February 2, 2008, with respect
to the 1995 Equity Plan and Macys 1994 Stock Incentive
Plan, referred to as the 1994 Stock Plan (included on the line
captioned Equity compensation plans approved by security
holders).
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Number of securities
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Number of securities
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Weighted-average
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remaining available for
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to be issued upon
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exercise price of
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future issuance under
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exercise of
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outstanding
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equity compensation plans
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outstanding options,
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options, warrants
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(excluding securities
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warrants and rights
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and rights ($)
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reflected in column (a))
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Plan Category
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(a)
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(b)
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(c)
|
|
|
Equity compensation plans approved by security holders
|
|
|
37,081,750
|
|
|
|
29.73
|
|
|
|
19,272,727
|
|
Equity compensation plans not approved by security holders
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Total
|
|
|
37,081,750
|
|
|
|
29.73
|
|
|
|
19,272,727
|
|
The foregoing table does not reflect shares of restricted stock
previously issued under the 1995 Equity Plan or the 1994 Stock
Plan. As of February 2, 2008:
|
|
|
|
|
338,500 shares of restricted stock were outstanding and
subject to possible forfeiture, and
|
|
|
|
3,756,000 shares of common stock were available for future
issuance as restricted stock or restricted stock units under the
1995 Equity Plan and the 1994 Stock Plan.
|
The shares remaining available for future issuance as restricted
stock or restricted stock units are included in the totals
reflected in column (c). Under the 1995 Equity Plan and the 1994
Stock Plan, if these shares are not issued as restricted stock
they may be made subject to grants of stock options.
The foregoing table does not reflect stock credits issued under
Macys Executive Deferred Compensation Plan, the Director
Deferred Compensation Plan, and the Associated Dry Goods
Corporation Executives Deferred Compensation Plan (assumed by
Macys in connection with its acquisition of May), which
plans have not been approved by Macys stockholders.
Pursuant to the Executive Deferred Compensation Plan, eligible
executives may elect to receive a portion of their cash
compensation in the form of stock credits. For a discussion of
stock credits issued to Non-Employee Directors under the
Director Deferred Compensation Plan, see Further
Information Concerning the Board of Directors
Director Compensation. Pursuant to the Associated Dry
Goods Corporation Executives Deferred Compensation Plan,
participants elected to receive a portion of their cash
compensation in the form of stock credits.
Under the plans described in the immediately preceding
paragraph, entitlements due to participants are expressed as
dollar amounts and then converted to stock credits in amounts
equal to the number of shares of common stock that could be
purchased by the applicable plan at current market prices with
the cash that otherwise would have been payable to the
participant. Under the Executive Deferred Compensation Plan and
the Associated Dry Goods Corporation Executives Deferred
Compensation Plan, each stock credit, other than a stock credit
payable in cash, entitles the holder to receive one share of
common stock upon the termination of the holders
employment or service with Macys. Payments include
dividend equivalents on the stock credits equal to any dividends
paid to stockholders on shares of common stock. No specific
numbers of shares are authorized for issuance under these plans.
7
ITEM 1.
ELECTION OF DIRECTORS
Macys current Certificate of Incorporation and By-Laws
provide that, beginning with the annual meeting in 2008, all
directors will be elected annually and will serve one-year terms.
In accordance with the recommendation of the NCG Committee, the
Board has nominated Stephen F. Bollenbach, Deirdre P. Connelly,
Meyer Feldberg, Sara Levinson, Terry J. Lundgren, Joseph
Neubauer, Joseph A. Pichler, Joyce M. Roché, Karl M. von
der Heyden, Craig E. Weatherup and Marna C. Whittington, each of
whom is currently a member of the Board, for election as
directors. If elected, such nominees will serve for a one-year
term to expire at Macys annual meeting of stockholders in
2009 or until their successors are duly elected and qualified.
Information regarding these nominees is set forth below. Ages
are as of March 21, 2008.
Each nominee has consented to being nominated and agreed to
serve if elected. If any nominee becomes unavailable to serve as
a director before the annual meeting, the Board may designate a
substitute nominee and the persons named as proxies may, in
their discretion, vote your shares for the substitute nominee
designated by the Board. Alternatively, the Board may reduce the
number of directors to be elected at the annual meeting.
The Board recommends that you vote FOR the election of the
nominees named above, and your proxy will be so voted unless you
specify otherwise.
Nominees
for Election as Directors
Stephen
F. Bollenbach
Mr. Bollenbach, age 65, has been the Non-Executive
Chairman of the Board of Directors of KB Home, a homebuilding
company, since April 2007. He served as co-Chairman and Chief
Executive Officer of Hilton Hotels Corporation from May 2004
until his retirement in October 2007. From February 1996 to May
2004 he served as Chief Executive Officer and President of
Hilton Hotels Corporation. He is also a member of the boards of
directors of American International Group, Inc., KB Home and
Time Warner Inc. Mr. Bollenbach has been a director since
June 2007.
Deirdre
P. Connelly
Ms. Connelly, age 47, has been President
U.S. Operations of Eli Lilly and Company since June 2005.
From October 2004 to June 2005, Ms. Connelly served as
Senior Vice President Human Resources of Eli Lilly
and Company. From May 2004 to October 2004, she served as Vice
President Human Resources of Eli Lilly and Company.
From 2003 to May 2004, Ms. Connelly served as Executive
Director, Human Resources U.S. Operations of
Eli Lilly and Company. From 2001 to 2003, she served as Leader,
Womens Health Business U.S. Operations of
Eli Lilly and Company. Ms. Connelly has been a director
since January 2008.
Meyer
Feldberg
Professor Feldberg, age 66, has been Dean Emeritus and
Professor of Leadership and Ethics at Columbia Business School
at Columbia University since June 2004. Prior to that time, he
served as the Dean of the Columbia Business School at Columbia
University from 1989 to June 2004. He is currently on leave of
absence from Columbia University and is serving as a Senior
Advisor at Morgan Stanley. In 2007 Mayor Michael Bloomberg
appointed Professor Feldberg as the President of NYC Global
Partners, an office in the Mayors office that manages the
relationships between New York City and other global cities
around the
8
world. Professor Feldberg is also a member of the boards of
directors of Revlon, Inc., Primedia, Inc., UBS Global Asset
Management and SAPPI Limited. Professor Feldberg has been a
director since May 1992.
Sara
Levinson
Ms. Levinson, age 57, was the Non-Executive Chairman
of ClubMom, Inc. from October 2002 until February 2008 and was
Chairman and Chief Executive Officer of ClubMom from May 2000
through September 2002. She was President of the Womens
Group of Rodale, Inc. from October 2002 until June 2005. From
September 1994 through April 2000, she was President of NFL
Properties, Inc. Ms. Levinson is also a member of the
boards of directors of CafeMom (CMI Marketing, Inc.), Harley
Davidson, Inc. and KickApps Corporation. Ms. Levinson has
been a director since May 1997.
Terry
J. Lundgren
Mr. Lundgren, age 55, has been Chairman of Macys
since January 15, 2004 and President and Chief Executive
Officer of Macys since February 26, 2003. Prior to
that time, he served as the President/Chief Operating Officer
and Chief Merchandising Officer of Macys since
April 15, 2002. From May 1997 until April 15, 2002, he
was President and Chief Merchandising Officer of Macys.
Mr. Lundgren has been a director since May 1997.
Joseph
Neubauer
Mr. Neubauer, age 66, has been Chairman and Chief
Executive Officer of ARAMARK Holdings Corporation since January
2007. From September 2004 to January 2007, Mr. Neubauer
served as Chairman and Chief Executive Officer of ARAMARK
Corporation. From January 2004 to September 2004 he served as
Executive Chairman of ARAMARK Corporation. Prior to that, he was
Chief Executive Officer of ARAMARK Corporation from 1983 until
December 2003 and Chairman from 1984 until December 2003. He is
also a member of the boards of directors of ARAMARK Corporation,
Verizon Communications, Inc. and Wachovia Corporation.
Mr. Neubauer has been a director since September 1992.
Joseph
A. Pichler
Mr. Pichler, age 68, was Chairman of The Kroger Co.
from June 2003 until June 2004 and was Chairman and Chief
Executive Officer of The Kroger Co. from September 1990 until
June 2003. Mr. Pichler has been a director since December
1997.
Joyce
M. Roché
Ms. Roché, age 61, is the President and Chief
Executive Officer of Girls Incorporated, a national non-profit
research, education and advocacy organization. Prior to assuming
her position at Girls Incorporated in September 2000,
Ms. Roché was an independent marketing consultant from
1998 to August 2000. She served as President and Chief Operating
Officer of Carson, Inc. from 1996 to 1998 and also held senior
marketing positions with Carson, Inc., Revlon, Inc. and Avon,
Inc. Ms. Roché is also a member of the boards of
directors of Anheuser-Busch Companies, Inc., AT&T, Inc. and
Tupperware Corporation. Ms. Roché has been a director
since February 2006.
9
Karl
M. von der Heyden
Mr. von der Heyden, age 71, was Vice Chairman of the Board
of Directors of PepsiCo, Inc. from September 1996 to January
2001. He is also a member of the boards of directors of
Dreamworks Animation SKG, Inc. and NYSE Euronext. Mr. von der
Heyden has been a director since February 1992.
Craig
E. Weatherup
Mr. Weatherup, age 62, worked with PepsiCo, Inc. for
24 years and served as Chief Executive Officer of its
world-wide Pepsi-Cola business and President of PepsiCo, Inc.
Mr. Weatherup also led the initial public offering of The
Pepsi Bottling Group, Inc., where he served as Chairman and
Chief Executive Officer from March 1999 to January 2003.
Mr. Weatherup is also a member of the board of directors of
Starbucks Corporation. Mr. Weatherup has been a director
since August 1996.
Marna
C. Whittington
Dr. Whittington, age 60, has been President of
Nicholas Applegate Capital Management since 2001 and Chief
Operating Officer of Allianz Global Investors, the parent of
Nicholas Applegate Capital Management, since 2002.
Dr. Whittington is also a member of the board of directors
of Rohm & Haas Company. Dr. Whittington has been
a director since June 1993.
FURTHER
INFORMATION CONCERNING THE BOARD OF DIRECTORS
Attendance
at Meetings
The Board held 12 meetings during the fiscal year ended
February 2, 2008, referred to as fiscal 2007. During fiscal
2007, no director attended fewer than 75%, in the aggregate, of
the total number of meetings of the Board and Board Committees
on which such director served.
Director
Attendance at Annual Meetings
As a matter of policy, Macys expects its directors to make
reasonable efforts to attend Macys annual meetings of
stockholders. All directors who were directors as of the date of
the annual meeting attended Macys most recent annual
meeting of stockholders.
Communications
with the Board
You may communicate with the full Board, the Audit Committee,
the Non-Employee Directors, or any individual director by
communicating through Macys Internet website at
www.macysinc.com/ir/corpgov or by mailing such communications to
7 West Seventh Street, Cincinnati, Ohio 45202, Attn:
General Counsel. Such communications should indicate to whom
they are addressed. We will refer any communications we receive
that relate to accounting, internal accounting controls or
auditing matters to members of the Audit Committee unless the
communication is otherwise addressed. You may communicate
anonymously
and/or
confidentially if you desire. Macys Office of the General
Counsel will collect all communications and forward them to the
appropriate director(s).
10
Director
Independence
Macys Corporate Governance Principles require that a
majority of the Board consist of directors who the Board has
determined do not have any material relationship with
Macys and are independent. The Board has adopted standards
for director independence to assist the Board in determining if
a director is independent. These standards, disclosed on
Macys website at www.macysinc.com/ir/corpgov, are as
follows:
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|
|
|
|
The director may not be (and may not have been within the
preceding 60 months) an employee and no member of the
directors immediate family may be (and may not have been
within the preceding 36 months) an executive officer of
Macys or any of its subsidiaries. For purposes of these
Standards for Director Independence, immediate
family includes a persons spouse, parents, children,
siblings, mothers and
fathers-in-law,
sons and
daughters-in-law,
brothers and
sisters-in-law,
and anyone (other than domestic employees) who shares such
persons home.
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|
The director is not a party to any contract pursuant to which
such director provides personal services (other than as a
director) to Macys or any of its subsidiaries.
|
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|
Neither the director nor any member of his or her immediate
family receives, or has received within the preceding
36 months, direct compensation of more than $100,000 per
year from Macys or any of its subsidiaries (other than
director and committee fees and pension or other forms of
deferred compensation for prior service that is not contingent
on continued service or, in the case of an immediate family
member, compensation for service as a non-executive employee).
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|
Neither the director nor any member of his or her immediate
family is (and has not been within the preceding 60 months)
affiliated with or employed in a professional capacity,
including as an executive officer, partner or principal, by any
corporation or other entity that is or was a paid adviser,
consultant or provider of professional services to, or a
substantial supplier of, Macys or any of its subsidiaries.
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|
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|
The director is not an employee or executive officer and no
member of his or her immediate family is an executive officer of
(and have not been within the preceding 36 months) a
company that makes payments to, or receives payments from,
Macys for property or services in an amount which, in any
single fiscal year, exceeds the greater of $1 million or 2%
of such other companys consolidated gross revenues.
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|
The director is not employed by an organization that received,
within the preceding 60 months, eleemosynary grants or
endowments from Macys or any of its subsidiaries in excess
of $250,000 in any fiscal year of Macys.
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|
The director is not a parent, child, sibling, aunt, uncle,
niece, nephew or first cousin of any other director of
Macys.
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|
The director is not a party to any agreement binding him or her
to vote, as a stockholder of Macys, in accordance with the
recommendations of the Board.
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|
The director is not a director of any corporation or other
entity (other than Macys) of which Macys Chairman or
Chief Executive Officer is also a director.
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|
Neither the director nor a member of the directors
immediate family is employed (and has not been employed for the
preceding 12 months) by another company whose compensation
committee includes as a member any of Macys present
executive officers.
|
11
The Board has determined that each of the following Non-Employee
Directors qualifies as independent under New York Stock Exchange
(NYSE) rules and satisfies Macys standards for
director independence: Stephen Bollenbach, Deirdre Connelly,
Meyer Feldberg, Sara Levinson, Joseph Neubauer, Joseph Pichler,
Joyce Roché, Karl von der Heyden, Craig Weatherup and Marna
Whittington. To assist the Board in making that determination,
the NCG Committee reviewed, among other things, each
directors employment status and other board commitments
and, where applicable, each directors (and his or her
immediate family members) affiliation with consultants,
service providers or suppliers of the company.
Non-Employee
Directors Meetings
The Non-Employee Directors meet in executive session without
management either before or after all regularly scheduled Board
meetings. The chairpersons of the Board Committees preside at
such sessions by rotation. Non-Employee Directors who are not
independent under the NYSE listing standards may participate in
these executive sessions, but the Board would then hold at least
one executive session each year exclusively for Non-Employee
Directors who are independent under the NYSE listing standards.
Committees
of the Board
The following standing committees of the Board were in existence
throughout fiscal 2007: the Audit Committee, the Compensation
and Management Development Committee, referred to as the CMD
Committee, the Finance Committee and the NCG Committee. The
table below provides the current members of each Board committee
and meeting information for fiscal 2007:
|
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|
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|
|
Name
|
|
Audit
|
|
|
CMD
|
|
|
Finance
|
|
|
NCG
|
|
|
Stephen F. Bollenbach
|
|
|
X
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
Deirdre P. Connelly
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
X
|
|
Meyer Feldberg
|
|
|
|
|
|
|
X
|
**
|
|
|
|
|
|
|
X
|
|
Sara Levinson
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
X
|
|
Terry J. Lundgren
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joseph Neubauer
|
|
|
X
|
**
|
|
|
X
|
|
|
|
X
|
|
|
|
|
|
Joseph A. Pichler
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
X
|
*
|
Joyce M. Roché
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
X
|
|
Karl M. von der Heyden
|
|
|
|
|
|
|
X
|
|
|
|
X
|
*
|
|
|
|
|
Craig E. Weatherup
|
|
|
|
|
|
|
X
|
*
|
|
|
|
|
|
|
X
|
|
Marna C. Whittington
|
|
|
X
|
*
|
|
|
|
|
|
|
X
|
**
|
|
|
|
|
2007 Meetings
|
|
|
5
|
|
|
|
4
|
|
|
|
6
|
|
|
|
5
|
|
Audit Committee. The Audit Committee was
established in accordance with the applicable requirements of
the Securities Exchange Act of 1934 and the NYSE. Its charter is
disclosed on Macys website at www.macysinc.com/ir/corpgov.
As required by the Audit Committee charter, all current members
of the Audit Committee are independent under Macys
standards for director independence. The Board has determined
that all members are financially literate for purposes of NYSE
listing standards, and that Dr. Whittington qualifies
12
as an audit committee financial expert because of
her business experience, understanding of generally accepted
accounting principles and financial statements, and educational
background.
The responsibilities of the Audit Committee include:
|
|
|
|
|
reviewing the professional services provided by Macys
independent registered public accounting firm and the
independence of such firm;
|
|
|
|
reviewing the scope of the audit by Macys independent
registered public accounting firm;
|
|
|
|
reviewing any proposed non-audit services by Macys
independent registered public accounting firm to determine if
the provision of such services is compatible with the
maintenance of their independence, and approval of same;
|
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|
reviewing Macys annual financial statements, systems of
internal accounting controls, material legal developments
relating thereto, and legal compliance policies and procedures;
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|
|
|
reviewing matters with respect to the legal, accounting,
auditing and financial reporting practices and procedures of
Macys as it may find appropriate or as may be brought to
its attention, including Macys compliance with applicable
laws and regulations;
|
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|
reviewing with members of Macys internal audit staff the
internal audit departments staffing, responsibilities and
performance, including its audit plans, audit results and
actions taken with respect to those results; and
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|
|
establishing procedures for the Audit Committee to receive,
review and respond to complaints regarding accounting, internal
accounting controls, and auditing matters, as well as
confidential, anonymous submissions by employees of concerns
related to questionable accounting or auditing matters.
|
See Report of the Audit Committee for further
information regarding certain reviews and discussions undertaken
by the Audit Committee.
Compensation and Management Development
Committee. The charter for the CMD Committee is
disclosed on Macys website at www.macysinc.com/ir/corpgov.
As required by the CMD Committee charter, all current members of
the CMD Committee are independent under Macys standards
for director independence.
The responsibilities of the CMD Committee include:
|
|
|
|
|
reviewing the salaries of the chief executive officer and other
executive officers of Macys and, either as a Committee or
together with the independent directors (as directed by the
Board), set compensation levels for these executives;
|
|
|
|
administering the bonus, incentive and stock option plans of
Macys, including (i) establishing any annual or
long-term performance goals and objectives and maximum annual or
long-term incentive awards for the chief executive officer and
the other executives, (ii) determining whether and the
extent to which annual
and/or
long-term performance goals and objectives have been achieved,
and (iii) determining related annual
and/or
long-term incentive awards for the chief executive officer and
the other executives;
|
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|
|
reviewing and approving the benefits of the chief executive
officer and the other executive officers of Macys;
|
13
|
|
|
|
|
reviewing and approving any proposed employment agreement with,
and any proposed severance, termination or retention plans,
agreements or payments applicable to, any executive officer of
Macys;
|
|
|
|
advising and consulting with Macys management regarding
pension, benefit and compensation plans, policies and practices
of Macys;
|
|
|
|
establishing chief executive officer and key executive
succession plans, including plans in the event of an emergency,
resignation or retirement; and
|
|
|
|
reviewing and monitoring executive development strategies and
practices for senior level positions and executives to assure
development of a pool of management and executive personnel for
adequate and orderly management succession.
|
Finance Committee. The charter for the Finance
Committee is disclosed on Macys website at
www.macysinc.com/ir/corpgov. As required by the Finance
Committee charter, a majority of the members of the Finance
Committee are independent under Macys standards for
director independence.
The responsibilities of the Finance Committee include:
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|
|
|
|
reviewing capital projects and other financial commitments and
approving such projects and commitments above $15 million
and below $25 million, reviewing and making recommendations
to the Board with respect to approval of all such projects and
commitments of $25 million and above, and reviewing and
tracking the actual progress of approved capital projects
against planned projections;
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|
|
|
reporting to the Board on potential transactions affecting
Macys capital structure, such as financings, refinancings
and the issuance, redemption or repurchase of Macys debt
or equity securities;
|
|
|
|
reporting to the Board on potential changes in Macys
financial policy or structure which could have a material
financial impact on Macys;
|
|
|
|
reviewing the financial considerations relating to acquisitions
and dispositions of businesses and operations involving
projected costs or income above $15 million and below
$25 million and approving all such transactions, and
reporting to the Board on all such transactions involving
projected costs or income of $25 million and above; and
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|
|
|
reviewing the management and performance of the assets of
Macys retirement plans.
|
Nominating and Corporate Governance
Committee. The charter for the NCG Committee is
disclosed on Macys website at www.macysinc.com/ir/corpgov.
As required by the NCG Committee charter, all current members of
the NCG Committee are independent under Macys standards
for director independence.
The responsibilities of the NCG Committee include:
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|
|
|
|
identifying and screening candidates for future Board membership;
|
|
|
|
proposing candidates to the Board to fill vacancies as they
occur, and proposing nominees to the Board for election by the
stockholders at annual meetings;
|
|
|
|
reviewing Macys Corporate Governance Principles and
recommending to the Board any modifications that the NCG
Committee deems appropriate;
|
|
|
|
overseeing the evaluation of and reporting to the Board on the
performance and effectiveness of the Board and its committees
and other issues of corporate governance, and recommending to
the Board
|
14
|
|
|
|
|
any changes concerning the composition, size, structure and
activities of the Board and the committees of the Board as the
NCG Committee deems appropriate based on its evaluations;
|
|
|
|
|
|
reviewing and reporting to the Board with respect to director
compensation and benefits and make recommendations to the Board
as the NCG Committee deems appropriate; and
|
|
|
|
considering possible conflicts of interest of Board members and
management and making recommendations to prevent, minimize, or
eliminate such conflicts of interest.
|
The NCG Committee reviews the director compensation program
periodically. To help it perform its responsibilities, the NCG
Committee makes use of company resources, including members of
senior management in Macys human resources and legal
departments. In addition, the NCG Committee engages the services
of Mercer as an independent outside compensation consultant to
assist the NCG Committee in assessing the competitiveness and
overall appropriateness of Macys director compensation
program.
Identification
and Selection of Nominees for the Board
Macys By-laws provide that director nominations may be
made by or at the direction of the Board. The NCG Committee is
charged with identifying individuals qualified to become Board
members and recommending such individuals to the Board for its
consideration. The NCG Committee is authorized, among other
means of identifying potential candidates, to employ third-party
search firms. In evaluating potential candidates, the NCG
Committee considers, among other things, the following:
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|
|
|
|
personal qualities and characteristics, accomplishments and
reputation in the business community;
|
|
|
|
knowledge of the communities in which Macys does business
and Macys industry or other industries relevant to
Macys business;
|
|
|
|
relevant experience and background that would benefit
Macys;
|
|
|
|
ability and willingness to commit adequate time to Board and
committee matters;
|
|
|
|
the fit of the individuals skills and personality with
those of other directors and potential directors in building a
Board that is effective, collegial and responsive to the needs
of Macys; and
|
|
|
|
diversity of viewpoints, background, experience and demographics.
|
The NCG Committee also takes into consideration whether
particular individuals satisfy the independence criteria set
forth in the NYSE listing standards and Macys standards
for director independence, together with any special criteria
applicable to service on various standing committees of the
Board. The full Board (a) considers candidates that the NCG
Committee recommends, (b) considers the optimum size of the
Board, (c) determines how to address any vacancies on the
Board, and (d) determines the composition of all Board
committees.
In fiscal 2006 and fiscal 2007, the NCG Committee retained an
independent director search firm, Heidrick &
Struggles, to identify and evaluate potential director
candidates based on the qualifications and characteristics
described above. The firm provides background information on
potential candidates and, if so directed by the NCG Committee,
makes initial contact with potential candidates to assess their
interest in becoming a director of Macys. NCG Committee
members then meet with and interview the potential candidates.
Stockholders have previously elected each of the director
nominees for the 2008 annual meeting, except for
Mr. Bollenbach and Ms. Connelly. Heidrick &
Struggles identified Mr. Bollenbach and Ms. Connelly
as potential candidates for director positions. Following an
extensive interview process, the NCG Committee
15
recommended to the Board that Mr. Bollenbach and
Ms. Connelly be appointed as Non-Employees Directors. The
Board approved Mr. Bollenbachs appointment in June
2007 and Ms. Connellys appointment in December 2007.
The NCG Committee will consider candidates for nomination
recommended by stockholders of Macys and will evaluate
such candidates using the same criteria discussed above that it
uses to evaluate director candidates identified by the NCG
Committee. Stockholders who wish to recommend a candidate for a
director nomination should write to the Nominating and Corporate
Governance Committee,
c/o Dennis
J. Broderick, Secretary, Macys, Inc., 7 West Seventh
Street, Cincinnati, Ohio 45202. The recommendation should
include the full name and address of the proposed candidate, a
description of the proposed candidates qualifications and
other relevant biographical information.
Director
Nominations by Stockholders
Macys By-Laws also provide that director nominations may
be made by the companys stockholders. The By-Laws require
that stockholders intending to nominate candidates for election
as directors deliver written notice thereof to the Secretary of
Macys not less than 60 days prior to the meeting of
stockholders. However, in the event that the date of the meeting
is not publicly announced by Macys by inclusion in a
report filed with the SEC or furnished to stockholders, or by
mail, press release or otherwise more than 75 days prior to
the meeting, notice by the stockholder to be timely must be
delivered to the Secretary of Macys not later than the
close of business on the tenth day following the day on which
such announcement of the date of the meeting was so
communicated. The By-Laws further require, among other things:
|
|
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|
|
that the notice by the stockholder set forth certain information
concerning such stockholder and the stockholders nominees,
including their names and addresses;
|
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|
|
a representation that the stockholder is entitled to vote at
such meeting and intends to appear in person or by proxy at the
meeting to nominate the person or persons specified in the
notice;
|
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the class and number of shares of Macys stock owned or
beneficially owned by such stockholder;
|
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a description of all arrangements or understandings between the
stockholder and each nominee;
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|
such other information as would be required to be included in a
proxy statement soliciting proxies for the election of the
nominees of such stockholder; and
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the consent of each nominee to serve as a director of
Macys if so elected.
|
The chairman of the Board may refuse to acknowledge the
nomination of any person not made in compliance with these
requirements. Similar procedures prescribed by the By-Laws are
applicable to stockholders desiring to bring any other business
before an annual meeting of the stockholders. See
Submission of Future Stockholder Proposals.
Corporate
Governance Principles and Code of Business Conduct and
Ethics
The Corporate Governance Principles and the Code of Business
Conduct and Ethics approved by the Board for adoption by
Macys are disclosed on Macys website at
www.macysinc.com/ir/corpgov. Stockholders may obtain copies of
these documents and the charters for the Board committees,
without charge, by sending a written request to the following
address: Secretary, Macys, Inc. 7 West Seventh,
Cincinnati, Ohio 45202.
16
Director
Compensation
Non-Employee Directors receive the following compensation:
|
|
|
Type of Compensation
|
|
Amount of Compensation
|
|
Board Retainer
|
|
$60,000 annually
|
Board or Board Committee Meeting Fee
|
|
$2,000 for each meeting attended and for each review session
with one or more members of management
|
Committee Chairperson Retainer
|
|
$10,000 annually
|
Equity Grant
|
|
up to 10,000 stock options annually
|
Matching Gift
|
|
up to $22,500 annually
|
Under Macys Director Deferred Compensation Plan, 50% of
the annual Board retainer (including the retainer payable to a
committee chair) and 50% of the meeting fees payable to
Non-Employee Directors (the Mandatory Stock
Compensation) are paid in credits representing the right
to receive shares of Macys common stock (Mandatory
Stock Credits), with the balance (Elective
Compensation) paid in cash or deferred under the Director
Deferred Compensation Plan. Mandatory Stock Compensation is
reflected in the Stock Awards column of the 2007
Non-Employee Director Summary Compensation Table below. Elective
Compensation is reflected in the Fees Earned or Paid in
Cash column of the 2007 Non-Employee Director Summary
Compensation Table below. If a Non-Employee elects to defer all
or a portion of the Elective Compensation into either stock
credits or cash credits under the Director Deferred Compensation
Plan, those amounts are not paid to him or her until service on
the Board ends. Mandatory Stock Credits and stock credits
relating to Elective Compensation that is deferred as stock
credits are calculated monthly. Shares of Macys common
stock associated with such stock credits are transferred
quarterly to a rabbi trust for the benefit of the participating
Non-Employee Director. Dividend equivalents on the amounts
deferred as stock credits are reinvested in
additional stock credits. Elective Compensation deferred as cash
credits earn interest each year at a rate equal to the yield
(percent per annum) on
30-Year
Treasury Bonds as of December 31 of the prior plan year.
Non-Employee Directors typically receive a non-qualified stock
option grant under the 1995 Equity Plan or the 1994 Stock Plan
on the date of the annual meeting. If an individual is elected
by the Board as a Non-Employee Director after the date of the
annual meeting and prior to the end of the calendar year, the
Non-Employee Director receives a pro-rated stock option grant
shortly after his or her election to the Board based on the
number of months remaining in the calendar year following the
date of his or her election. All options have a
10-year
term, vest 25% on each of the first four anniversaries following
the grant date, and are priced at the closing price of
Macys common stock on the NYSE on the day prior to the
grant date.
Non-Employee Directors may participate in the matching gift
program of the Macys Foundation on the same terms as all
company employees. Under this program, the Macys
Foundation will match up to a total of $22,500 of gifts made by
the director to approved charities in any calendar year.
Each Non-Employee Director and his or her spouse and eligible
dependents also receive executive discounts on merchandise
purchased at Macys stores. This benefit remains available
to them following retirement from the Board. As described below,
the retirement plan for Non-Employee Directors was terminated in
1997.
17
The following table reflects the compensation information for
each Non-Employee Director for fiscal 2007. Mr. Stiritz
retired as a Non-Employee Director on May 18, 2007.
Consequently, the table reflects the compensation paid or
payable to him through his retirement date. Mr. Lundgren
does not receive separate compensation for his service as a
Director; his compensation is reflected in the 2007 Summary
Compensation Table in the section titled Compensation of
the Named Executives for 2007.
2007
NON-EMPLOYEE DIRECTOR SUMMARY COMPENSATION TABLE
|
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|
|
|
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|
|
|
|
|
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|
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|
|
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Change in Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Value and
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Qualified
|
|
|
|
|
|
|
|
|
|
Fees Earned
|
|
|
|
|
|
|
|
|
Deferred
|
|
|
All Other
|
|
|
|
|
|
|
or Paid in
|
|
|
Stock Awards
|
|
|
Option Awards
|
|
|
Compensation
|
|
|
Compensation (5)
|
|
|
|
|
Name
|
|
Cash (1)($)
|
|
|
(1)(3)($)
|
|
|
(2)(3)($)
|
|
|
Earnings (4)($)
|
|
|
($)
|
|
|
Total($)
|
|
|
Stephen F. Bollenbach
|
|
|
31,500
|
|
|
|
29,000
|
|
|
|
73,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
133,500
|
|
Deirdre P. Connelly
|
|
|
3,500
|
|
|
|
3,500
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
7,000
|
|
Meyer Feldberg
|
|
|
50,000
|
|
|
|
81,950
|
|
|
|
371,742
|
|
|
|
4,911
|
|
|
|
43,655
|
|
|
|
552,258
|
|
Sara Levinson
|
|
|
50,000
|
|
|
|
84,224
|
|
|
|
118,868
|
|
|
|
0
|
|
|
|
20,598
|
|
|
|
273,690
|
|
Joseph Neubauer
|
|
|
56,000
|
|
|
|
96,869
|
|
|
|
143,400
|
|
|
|
5,298
|
|
|
|
30,400
|
|
|
|
331,967
|
|
Joseph A. Pichler
|
|
|
56,000
|
|
|
|
87,602
|
|
|
|
143,400
|
|
|
|
0
|
|
|
|
27,964
|
|
|
|
314,966
|
|
Joyce M. Roché
|
|
|
51,000
|
|
|
|
8,675
|
|
|
|
57,826
|
|
|
|
0
|
|
|
|
16,185
|
|
|
|
133,686
|
|
William P. Stiritz
|
|
|
18,661
|
|
|
|
(10,443
|
)
|
|
|
0
|
|
|
|
0
|
|
|
|
35,866
|
|
|
|
44,083
|
|
Karl M. von der Heyden
|
|
|
58,000
|
|
|
|
115,809
|
|
|
|
143,400
|
|
|
|
11,763
|
|
|
|
35,614
|
|
|
|
364,586
|
|
Craig E. Weatherup
|
|
|
63,000
|
|
|
|
91,344
|
|
|
|
118,868
|
|
|
|
759
|
|
|
|
52,609
|
|
|
|
326,580
|
|
Marna C. Whittington
|
|
|
59,000
|
|
|
|
112,245
|
|
|
|
118,868
|
|
|
|
1,214
|
|
|
|
60,529
|
|
|
|
351,856
|
|
|
|
|
(1) |
|
All Elective Compensation is reflected in the Fees Earned
or Paid in Cash column, whether it is paid currently in
cash or deferred under the Director Deferred Compensation Plan.
Eight of the Non-Employee Directors elected to defer all or a
portion of the Elective Compensation payable to them during
fiscal 2007, as follows: |
|
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|
|
|
|
|
|
|
|
|
|
|
|
Elective
|
|
Deferred
|
|
|
|
|
Compensation
|
|
as Cash
|
|
Deferred as Stock
|
Name
|
|
Deferred($)
|
|
Credits($)
|
|
Credits(#)
|
|
Bollenbach
|
|
|
29,000
|
|
|
|
0
|
|
|
|
879
|
|
Levinson
|
|
|
50,000
|
|
|
|
50,000
|
|
|
|
0
|
|
Neubauer
|
|
|
56,000
|
|
|
|
0
|
|
|
|
1,593
|
|
Pichler
|
|
|
56,000
|
|
|
|
56,000
|
|
|
|
0
|
|
Roché
|
|
|
38,250
|
|
|
|
0
|
|
|
|
1,088
|
|
Stiritz
|
|
|
18,661
|
|
|
|
0
|
|
|
|
428
|
|
Weatherup
|
|
|
63,000
|
|
|
|
0
|
|
|
|
1,778
|
|
Whittington
|
|
|
59,000
|
|
|
|
0
|
|
|
|
1,693
|
|
The amounts in the Stock Awards column reflect the
Mandatory Stock Compensation payable in fiscal 2007 plus the
variable accounting treatment and dollar amounts recognized for
financial statement
18
reporting purposes in accordance with Statement of Financial
Accounting Standards No. 123 (revised 2004),
Share-Based Payment (FAS 123R) for
fiscal 2007 for Mandatory Stock Credits issued in fiscal 2007
and prior years. Non-Employee Directors received the following
Mandatory Stock Credits with respect to the Mandatory Stock
Compensation payable to them in fiscal 2007:
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|
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|
|
|
|
|
|
|
|
|
|
|
|
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|
|
2007 Additional
|
|
|
|
|
|
|
Mandatory Stock
|
|
|
Mandatory Stock
|
|
|
Expense/(Credit) Relating to
|
|
|
|
|
Name
|
|
Credits(#)
|
|
|
Compensation($)
|
|
|
Variable Accounting($)
|
|
|
Total($)
|
|
|
Bollenbach
|
|
|
942
|
|
|
|
29,000
|
|
|
|
0
|
|
|
|
29,000
|
|
Connelly
|
|
|
147
|
|
|
|
3,500
|
|
|
|
0
|
|
|
|
3,500
|
|
Feldberg
|
|
|
1,410
|
|
|
|
50,000
|
|
|
|
31,950
|
|
|
|
81,950
|
|
Levinson
|
|
|
1,411
|
|
|
|
50,000
|
|
|
|
34,224
|
|
|
|
84,224
|
|
Neubauer
|
|
|
1,592
|
|
|
|
56,000
|
|
|
|
40,869
|
|
|
|
96,869
|
|
Pichler
|
|
|
1,586
|
|
|
|
56,000
|
|
|
|
31,602
|
|
|
|
87,602
|
|
Roché
|
|
|
1,449
|
|
|
|
51,000
|
|
|
|
(42,325
|
)
|
|
|
8,675
|
|
Stiritz
|
|
|
427
|
|
|
|
18,661
|
|
|
|
(29,104
|
)
|
|
|
(10,443
|
)
|
von der Heyden
|
|
|
1,660
|
|
|
|
58,000
|
|
|
|
57,809
|
|
|
|
115,809
|
|
Weatherup
|
|
|
1,777
|
|
|
|
63,000
|
|
|
|
28,344
|
|
|
|
91,344
|
|
Whittington
|
|
|
1,692
|
|
|
|
59,000
|
|
|
|
53,245
|
|
|
|
112,245
|
|
|
|
|
(2) |
|
The grant date fair value of the stock options granted to the
Non-Employee Directors other than Mr. Bollenbach in fiscal
2007 was $143,400. The grant date fair value of the stock
options granted to Mr. Bollenbach in fiscal 2007 was
$73,000. The amounts in the Option Awards column do
not reflect compensation actually received by the Non-Employee
Directors. The amounts reflect the dollar amount recognized for
financial statement reporting purposes in accordance with
FAS 123R for fiscal 2007 for stock options issued pursuant
to the 1995 Equity Plan. The tables below show that the amount
recognized includes the awards granted in fiscal 2007 and in as
many as four prior years. Ms. Connelly and Mr. Stiritz
did not receive an option grant in fiscal 2007. |
|
|
|
Since Mr. Neubauer, Mr. Pichler and Mr. von der Heyden
are over age 65, the full grant date fair market value of
their 2007 stock option awards was expensed in fiscal 2007. The
fair value of their stock option awards prior to fiscal 2007 has
previously been fully expensed. |
|
|
|
Mr. Bollenbach and Mr. Feldberg turned age 65
during fiscal 2007, so the full grant date fair market value of
their 2007 stock option awards was expensed in fiscal 2007. In
addition, the fair value of the portions of
Mr. Feldbergs stock option awards prior to fiscal
2007 that had not previously been fully expensed was expensed in
2007. |
|
|
|
Assumptions and terms used in the calculation of the amounts
expensed for fiscal 2007 are included in footnote 14 to
Macys audited financial statements included in Macys
Annual Report on
Form 10-K
for fiscal 2007 (the 2007
10-K),
in footnote 15 to Macys audited financial statements
included in Macys Annual Report on
Form 10-K
for fiscal 2006 (the 2006
10-K),
and in footnote 15 to Macys audited financial statements
included in Macys Annual Report on
Form 10-K
for fiscal 2005 (the 2005
10-K). |
19
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bollenbach
|
|
|
Feldberg
|
|
|
Levinson
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
Grant
|
|
Options
|
|
|
FMV
|
|
|
Expense
|
|
|
Grant
|
|
|
Options
|
|
|
FMV
|
|
|
Expense
|
|
|
Grant
|
|
|
Options
|
|
|
FMV
|
|
|
Expense
|
|
Date
|
|
(#)
|
|
|
($)
|
|
|
($)
|
|
|
Date
|
|
|
(#)
|
|
|
($)
|
|
|
($)
|
|
|
Date
|
|
|
(#)
|
|
|
($)
|
|
|
($)
|
|
|
7/2/07
|
|
|
5,000
|
|
|
|
14.60
|
|
|
|
73,000
|
|
|
|
5/18/07
|
|
|
|
10,000
|
|
|
|
14.34
|
|
|
|
143,400
|
|
|
|
5/18/07
|
|
|
|
10,000
|
|
|
|
14.34
|
|
|
|
23,901
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/19/06
|
|
|
|
10,000
|
|
|
|
13.57
|
|
|
|
113,083
|
|
|
|
5/19/06
|
|
|
|
10,000
|
|
|
|
13.57
|
|
|
|
33,925
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7/13/05
|
|
|
|
10,000
|
|
|
|
13.12
|
|
|
|
79,267
|
|
|
|
7/13/05
|
|
|
|
10,000
|
|
|
|
13.12
|
|
|
|
32,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/21/04
|
|
|
|
10,000
|
|
|
|
9.30
|
|
|
|
31,000
|
|
|
|
5/21/04
|
|
|
|
10,000
|
|
|
|
9.30
|
|
|
|
23,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/16/03
|
|
|
|
10,000
|
|
|
|
5.99
|
|
|
|
4,992
|
|
|
|
5/16/03
|
|
|
|
10,000
|
|
|
|
5.99
|
|
|
|
4,992
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
371,742
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
118,868
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Neubauer
|
|
|
Pichler
|
|
|
Roché
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
Grant
|
|
Options
|
|
|
FMV
|
|
|
Expense
|
|
|
Grant
|
|
|
Options
|
|
|
FMV
|
|
|
Expense
|
|
|
Grant
|
|
|
Options
|
|
|
FMV
|
|
|
Expense
|
|
Date
|
|
(#)
|
|
|
($)
|
|
|
($)
|
|
|
Date
|
|
|
(#)
|
|
|
($)
|
|
|
($)
|
|
|
Date
|
|
|
(#)
|
|
|
($)
|
|
|
($)
|
|
|
5/18/07
|
|
|
10,000
|
|
|
|
14.34
|
|
|
|
143,400
|
|
|
|
5/18/07
|
|
|
|
10,000
|
|
|
|
14.34
|
|
|
|
143,400
|
|
|
|
5/18/07
|
|
|
|
10,000
|
|
|
|
14.34
|
|
|
|
23,901
|
|
5/19/06
|
|
|
10,000
|
|
|
|
13.57
|
|
|
|
0
|
|
|
|
5/19/06
|
|
|
|
10,000
|
|
|
|
13.57
|
|
|
|
0
|
|
|
|
5/19/06
|
|
|
|
10,000
|
|
|
|
13.57
|
|
|
|
33,925
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7/13/05
|
|
|
10,000
|
|
|
|
13.12
|
|
|
|
0
|
|
|
|
7/13/05
|
|
|
|
10,000
|
|
|
|
13.12
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
57,826
|
|
5/21/04
|
|
|
10,000
|
|
|
|
9.30
|
|
|
|
0
|
|
|
|
5/21/04
|
|
|
|
10,000
|
|
|
|
9.30
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/16/03
|
|
|
10,000
|
|
|
|
5.99
|
|
|
|
0
|
|
|
|
5/16/03
|
|
|
|
10,000
|
|
|
|
5.99
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
143,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
143,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
von der Heyden
|
|
|
Weatherup
|
|
|
Whittington
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
Grant
|
|
Options
|
|
|
FMV
|
|
|
Expense
|
|
|
Grant
|
|
|
Options
|
|
|
FMV
|
|
|
Expense
|
|
|
Grant
|
|
|
Options
|
|
|
FMV
|
|
|
Expense
|
|
Date
|
|
(#)
|
|
|
($)
|
|
|
($)
|
|
|
Date
|
|
|
(#)
|
|
|
($)
|
|
|
($)
|
|
|
Date
|
|
|
(#)
|
|
|
($)
|
|
|
($)
|
|
|
5/18/07
|
|
|
10,000
|
|
|
|
14.34
|
|
|
|
143,400
|
|
|
|
5/18/07
|
|
|
|
10,000
|
|
|
|
14.34
|
|
|
|
23,901
|
|
|
|
5/18/07
|
|
|
|
10,000
|
|
|
|
14.34
|
|
|
|
23,901
|
|
5/19/06
|
|
|
10,000
|
|
|
|
13.57
|
|
|
|
0
|
|
|
|
5/19/06
|
|
|
|
10,000
|
|
|
|
13.57
|
|
|
|
33,925
|
|
|
|
5/19/06
|
|
|
|
10,000
|
|
|
|
13.57
|
|
|
|
33,925
|
|
7/13/05
|
|
|
10,000
|
|
|
|
13.12
|
|
|
|
0
|
|
|
|
7/13/05
|
|
|
|
10,000
|
|
|
|
13.12
|
|
|
|
32,800
|
|
|
|
7/13/05
|
|
|
|
10,000
|
|
|
|
13.12
|
|
|
|
32,800
|
|
5/21/04
|
|
|
10,000
|
|
|
|
9.30
|
|
|
|
0
|
|
|
|
5/21/04
|
|
|
|
10,000
|
|
|
|
9.30
|
|
|
|
23,250
|
|
|
|
5/21/04
|
|
|
|
10,000
|
|
|
|
9.30
|
|
|
|
23,250
|
|
5/16/03
|
|
|
10,000
|
|
|
|
5.99
|
|
|
|
0
|
|
|
|
5/16/03
|
|
|
|
10,000
|
|
|
|
5.99
|
|
|
|
4,992
|
|
|
|
5/16/03
|
|
|
|
10,000
|
|
|
|
5.99
|
|
|
|
4,992
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
143,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
118,868
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
118,868
|
|
20
|
|
|
(3) |
|
The Non-Employee Directors held the following stock options and
stock credits as of the end of fiscal 2007 (values are based on
a closing price at fiscal year-end of $28.00): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options
|
|
|
Stock Credits
|
|
|
|
Number of Securities Underlying
|
|
|
|
|
|
|
|
|
|
Unexercised Options
|
|
|
Number of Stock
|
|
|
Market Value of
|
|
|
|
(#)
|
|
|
Credits
|
|
|
Stock Credits
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
(#)
|
|
|
($)
|
|
|
Bollenbach
|
|
|
0
|
|
|
|
5,000
|
|
|
|
1,821
|
|
|
|
50,988
|
|
Connelly
|
|
|
0
|
|
|
|
0
|
|
|
|
147
|
|
|
|
4,116
|
|
Feldberg
|
|
|
66,000
|
|
|
|
25,000
|
|
|
|
4,537
|
|
|
|
127,036
|
|
Levinson
|
|
|
66,000
|
|
|
|
25,000
|
|
|
|
16,729
|
|
|
|
468,412
|
|
Neubauer
|
|
|
66,000
|
|
|
|
25,000
|
|
|
|
59,898
|
|
|
|
1,677,144
|
|
Pichler
|
|
|
66,000
|
|
|
|
25,000
|
|
|
|
15,046
|
|
|
|
421,288
|
|
Roché
|
|
|
2,500
|
|
|
|
17,500
|
|
|
|
4,575
|
|
|
|
128,100
|
|
Stiritz
|
|
|
3,336
|
|
|
|
8,330
|
|
|
|
3,279
|
|
|
|
91,812
|
|
von der Heyden
|
|
|
66,000
|
|
|
|
25,000
|
|
|
|
43,359
|
|
|
|
1,214,052
|
|
Weatherup
|
|
|
66,000
|
|
|
|
25,000
|
|
|
|
34,676
|
|
|
|
970,928
|
|
Whittington
|
|
|
66,000
|
|
|
|
25,000
|
|
|
|
23,033
|
|
|
|
644,924
|
|
|
|
|
(4) |
|
The present value of benefits under the Non-Employee Director
retirement plan for each individual was determined as a deferred
temporary life annuity based on years of Board service prior to
May 16, 1997. The present value basis includes a discount
rate of 5.95% and mortality rates under the RP2000CH table
projected to January 1, 2006 using scale AA. Scale AA
defines how future mortality improvements are incorporated into
the projected mortality table and is based on a blend of Federal
Civil Service and Social Security experience from 1977 through
1993. The calculations assume that the annual retainer remains
at $60,000 and a retirement at age 72, the mandatory
retirement age for Directors. |
|
(5) |
|
All Other Compensation includes the items shown
below. Merchandise discounts are credited to the Directors
charge accounts.
Gross-up on
taxes on the merchandise discount are paid in cash after the end
of the year, so the amounts shown reflect the
gross-up on
the prior fiscal year amounts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merchandise
|
|
|
|
|
|
Matching
|
|
|
|
|
|
|
Discount
|
|
|
Gross-Up
|
|
|
Gift
|
|
|
Total
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Bollenbach
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Connelly
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Feldberg
|
|
|
15,132
|
|
|
|
6,333
|
|
|
|
22,190
|
|
|
|
43,655
|
|
Levinson
|
|
|
4,793
|
|
|
|
8,054
|
|
|
|
7,750
|
|
|
|
20,598
|
|
Neubauer
|
|
|
13,235
|
|
|
|
4,665
|
|
|
|
12,500
|
|
|
|
30,400
|
|
Pichler
|
|
|
1,882
|
|
|
|
3,582
|
|
|
|
22,500
|
|
|
|
27,964
|
|
Roché
|
|
|
4,488
|
|
|
|
0
|
|
|
|
11,697
|
|
|
|
16,185
|
|
Stiritz
|
|
|
35,866
|
|
|
|
0
|
|
|
|
0
|
|
|
|
35,866
|
|
von der Heyden
|
|
|
7,816
|
|
|
|
5,299
|
|
|
|
22,500
|
|
|
|
35,614
|
|
Weatherup
|
|
|
23,330
|
|
|
|
6,779
|
|
|
|
22,500
|
|
|
|
52,609
|
|
Whittington
|
|
|
29,272
|
|
|
|
8,757
|
|
|
|
22,500
|
|
|
|
60,529
|
|
21
Director
Retirement Plan
Macys retirement plan for Non-Employee Directors was
terminated on a prospective basis effective May 16, 1997
(the Plan Termination Date). As a result of such
termination, persons who first become Non-Employee Directors
after the Plan Termination Date will not be entitled to receive
any benefit from the plan. Persons who were Non-Employee
Directors as of the Plan Termination Date will be entitled to
receive retirement benefits accrued as of the Plan Termination
Date. Subject to an overall limit in an amount equal to the
aggregate retirement benefit accrued as of the Plan Termination
Date (i.e., the product of the amount of the annual Board
retainer earned immediately prior to retirement and the years of
Board service prior to the Plan Termination Date), eligible
retirees who retire from service as Non-Employee Directors will
be entitled to receive an annual payment equal to the amount of
the annual Board retainer earned immediately prior to
retirement, payable in monthly installments, commencing at
retirement and continuing for the lesser of such persons
remaining life or a number of years equal to such persons
years of Board service prior to the Plan Termination Date. There
are no survivor benefits under the terms of the retirement plan.
Five of the current Non-Employee Directors participate in the
plan. If they had retired on December 31, 2007, each would
have been entitled to a $60,000 annual payment for the following
maximum number of years:
|
|
|
|
|
Name
|
|
Years
|
|
|
Feldberg
|
|
|
5
|
|
Neubauer
|
|
|
5
|
|
von der Heyden
|
|
|
5
|
|
Weatherup
|
|
|
1
|
|
Whittington
|
|
|
4
|
|
Director
Stock Ownership Guidelines
In fiscal year 2005, the NCG Committee recommended, and the
Board adopted, stock ownership guidelines for Non-Employee
Directors. Under these guidelines, Non-Employee Directors are
required to accumulate over time shares of Macys common
stock equal in value to at least five times the annual Board
retainer. Currently, the annual Board retainer is $60,000, so
the guideline currently is $300,000 worth of Macys common
stock. Shares counted toward this requirement include:
|
|
|
|
|
any shares beneficially owned by the director;
|
|
|
|
restricted stock before the restrictions have lapsed; and
|
|
|
|
stock credits or other stock units credited to a directors
account.
|
Macys common stock subject to unvested or unexercised
stock options granted to Non-Employee Directors does not count
toward the ownership requirement. Non-Employee Directors must
comply with these guidelines by December 9, 2010 or within
five years from the date the directors Board service
commenced, whichever is later. As of the end of the last fiscal
year, all Non-Employee Directors that have served as Directors
for five or more years owned sufficient shares to satisfy the
ownership guidelines.
ITEM 2. APPOINTMENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has appointed KPMG LLP, an independent
registered public accounting firm, to audit the books, records
and accounts of Macys for the fiscal year ending
January 31, 2009. KPMG LLP and its predecessors have served
as the independent registered public accounting firm for
Macys since 1988, and
22
the Audit Committee considers them well qualified.
Representatives of KPMG LLP are expected to be present at the
annual meeting and will have the opportunity to make a statement
if they desire to do so. It is also expected that they will be
available to respond to appropriate questions. The Audit
Committee has asked the Board to submit to stockholders a
proposal asking stockholders to ratify the appointment of KPMG
LLP. If the appointment of KPMG LLP is not ratified by
stockholders, the Audit Committee will take such action, if any,
with respect to the appointment of the independent registered
public accounting firm as the Audit Committee deems appropriate.
Fees Paid
to Independent Registered Public Accounting Firm
The table below summarizes the fees paid to KPMG LLP during
fiscal 2007 and fiscal 2006:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Audit-
|
|
|
|
|
|
All
|
|
|
|
|
Year
|
|
|
Audit Fees($)
|
|
|
Related Fees($)
|
|
|
Tax Fees($)
|
|
|
Other Fees($)
|
|
|
Total($)
|
|
|
|
2007
|
|
|
|
5,297,200
|
|
|
|
1,526,300
|
|
|
|
180,500
|
|
|
|
0
|
|
|
|
7,004,000
|
|
|
2006
|
|
|
|
5,727,500
|
|
|
|
3,336,372
|
|
|
|
162,974
|
|
|
|
0
|
|
|
|
9,226,846
|
|
Audit fees represent fees for professional services rendered for
the audit of Macys annual financial statements, the audit
of Macys internal controls over financial reporting and
the reviews of the interim financial statements included in
Macys
Forms 10-Q.
Audit-related fees represent professional services principally
related to the audits of financial statements of employee
benefit plans, audits of financial statements of certain
subsidiaries and certain agreed upon procedures reports.
Tax fees represent professional services related to tax
compliance and consulting services, provided, however, that such
tax consulting services did not involve the provision of advice
regarding tax strategy or planning.
All other fees represent professional services other than those
covered above.
The Audit Committee has adopted policies and procedures for the
pre-approval of all permitted non-audit services provided by
Macys independent registered public accounting firm. A
description of such policies and procedures is attached as
Appendix A to this proxy statement and incorporated herein
by reference.
The Board recommends that you vote FOR ratification of the
appointment of KPMG LLP, and your proxy will be so voted unless
you specify otherwise.
COMPENSATION
DISCUSSION & ANALYSIS
Overview
Macys is one of the nations premier retailers, with
fiscal 2007 sales of $26.3 billion. At the end of fiscal
2007, Macys operated more than 850 department stores in
45 states, the District of Columbia, Guam and Puerto Rico
under the names of Macys and Bloomingdales.
Macys also operates macys.com, bloomingdales.com and
Bloomingdales By Mail. The company employs about 182,000
regular full-time and part-time employees.
Managing a nation-wide retail business requires a team of
committed, talented and experienced executives. Macys
stores and direct-to-customer business operations compete with
many retailing formats in the geographic areas in which they
operate, including department stores, specialty stores, general
merchandise
23
stores, off-price and discount stores, new and established forms
of home shopping (including the Internet, mail order catalogs
and television) and manufacturers outlets, among others.
In addition to competing with these other retailers for
customers, Macys also must compete very aggressively for
executive talent.
Macys executive compensation philosophy is straightforward
and consistent Macys pays for performance.
Macys executives are accountable for the performance of
the business units they manage and are compensated based on that
performance. Executives are rewarded when defined milestones are
achieved and value is created for Macys stockholders.
This Compensation Discussion & Analysis provides
information regarding the compensation paid to the following
individuals, referred to as the Named Executives, in fiscal 2007:
|
|
|
|
|
Terry J. Lundgren, Chairman, President and Chief Executive
Officer;
|
|
|
|
Karen M. Hoguet, Executive Vice President and Chief Financial
Officer;
|
|
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Thomas L. Cole, Vice Chair;
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Janet E. Grove, Vice Chair; and
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Susan D. Kronick, Vice Chair.
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Macys executive compensation program for the Named
Executives consists of cash compensation in the form of
performance-based cash incentives and base salaries and
long-term equity-based awards in the form of stock options,
stock credits and, to a lesser degree, restricted stock. Each
year, the CMD Committee of the Board, which is made up entirely
of independent directors, recommends to the Board the
compensation for Mr. Lundgren and determines the
compensation for the other Named Executives.
Macys compensation mix relies heavily on long-term equity
awards to attract and retain an outstanding executive team and
to ensure a strong connection between executive compensation and
financial performance, operational and strategic objectives and
stockholder interests. The CMD Committee awards approximately
60% of the long-term equity awards in the form of stock credits
and approximately 40% in the form of stock options. The CMD
Committee awards restricted stock on a selective basis. Stock
options and restricted stock foster employee stock ownership
and, together with stock credits, focus the management team on
increasing value for stockholders. Because the value of these
equity-based awards depends on Macys future stock price,
the awards link compensation to future financial performance.
Stock credits provide executives the right to receive the value
of the underlying common stock following two- and three-year
holding periods after vesting. Because the vesting of a portion
of the core stock credits depends on achievement of the
companys Four Priorities and other measures, these awards
also link compensation to operational and strategic performance.
The performance-based cash incentive plan compensates the Named
Executives for achieving specific financial goals established
annually by the CMD Committee. The CMD Committee sets aggressive
goals at the beginning of each year based on financial
objectives in Macys internal business plan for the fiscal
year. Payments are not automatic, however, because the CMD
Committee may exercise its discretion to reduce (but not
increase) the amount of any incentive payment.
For fiscal 2007, the CMD Committee awarded stock option grants
to each Named Executive under terms consistent with Macys
annual stock option grant program. The Named Executives did not
receive a cash incentive for fiscal 2007 performance because
Macys did not achieve the threshold level of performance
established under the companys bonus plan. The CMD
Committee increased base salaries for the Named Executives in
March 2007 by an average of 7.0% to maintain salary at levels
deemed appropriate by the CMD
24
Committee in light of competitive pay analyses, the
contributions of each Named Executive to the advancement of the
integration process related to the May merger, the increased
size of the company following the May merger, internal
comparability and other factors. The CMD Committee awarded the
Named Executives 95% of the core stock credits granted to the
Named Executives in fiscal 2006 under the
2006-2007
stock credit plan that had performance objectives relating to
the companys progress on the Four Priorities and 100% of
the merger stock credits granted to them in fiscal 2006 that had
performance objectives relating to achieving synergies resulting
from the May merger. In addition, in connection with the renewal
of his employment agreement, the CMD Committee awarded retention
stock option and restricted stock grants to Mr. Lundgren.
EXECUTIVE
COMPENSATION PROGRAM OBJECTIVES
Compensation
Philosophy
Macys overall compensation program is performance-driven
and designed to support the needs of the business by:
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Providing Competitive and Reasonable Compensation
Opportunities.
|
Macys compensation levels and individual compensation
programs are assessed against market norms periodically by the
CMD Committee, with input from independent outside compensation
consultants as needed. Under ordinary circumstances, the CMD
Committee undertakes a comprehensive review of the program
approximately every three years. Pay data is validated against
several benchmarks, including specific pay levels of other large
retail and vendor organizations and information from published
surveys of the retail industry and general industry. In
addition, compensation of individual executives or specific
plans or practices are reviewed more frequently, depending on
business needs.
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Focusing on Results and Strategic Initiatives.
|
Macys compensation programs are based on measures of
business success. They reflect a combination of specific
internal measurements of success (such as EBIT, sales and cash
flow) and external measurements of success (such as customer
satisfaction and stock price performance). A portion of the
compensation program focuses on the strategic initiatives that
will help continue to differentiate Macys from other
retailers and that are important in making Macys and
Bloomingdales stores the customers first choice in
shopping.
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Fostering a Pay for Performance Culture.
|
A significant portion of an executives compensation
program is linked to variable compensation components, such as
short- term cash incentives, stock options, stock credits and
restricted stock. As a result, an individuals compensation
level is dependent on individual and company performance,
including stock price appreciation. The mix of components and
the proportion of each as a percentage of total compensation may
vary from year to year, but the total mix is designed to
encourage maximum performance.
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Attracting and Retaining Key Executives.
|
Macys executives are recognized as some of the most
talented and sought after people in the retail industry, and
Macys training and development programs have earned
national recognition. The compensation programs are designed to
attract and retain high caliber executives who are key to the
25
continued success of the business, who can provide consistent
leadership and whose talents support strong succession planning.
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Providing a Strong Link to our Stockholders
Interests.
|
The combination of the core principles above appropriately ties
Macys compensation to performance and thereby aligns the
interests of key executives with the interests of the
stockholders.
EXECUTIVE
COMPENSATION PROGRAM DESIGN
Role of
the CMD Committee
The CMD Committee administers the compensation program for the
senior management group. This group includes the Named
Executives and other corporate officers and division principals.
The CMD Committee also oversees the companys benefit plans
and policies, including its incentive and equity plans, and also
ensures that appropriate succession plans are in place for the
chief executive officer and other key executive positions. For a
more complete description of the responsibilities of the CMD
Committee, see Further Information Concerning the Board of
Directors Committees of the Board and the
charter for the CMD Committee posted on Macys website at
www.macysinc.com/ir/corpgov.
Role of
the Compensation Consultant
The CMD Committee engages the services of Mercer as an outside
compensation consultant to help the CMD Committee assess the
competitiveness and overall appropriateness of Macys
executive compensation program. In 2007, Mercer supported the
CMD Committees annual evaluation of
Mr. Lundgrens compensation and its discussions
regarding the terms of Mr. Lundgrens new employment
agreement. Mercer reviewed Mr. Lundgrens compensation
against the peer groups of companies described below. This
analysis also considered Macys performance relative to the
performance of retail peer companies during his tenure as chief
executive officer, as well as historical compensation and market
trends. Mercer also reviews the compensation of the other Named
Executives and advises the CMD Committee on market trends.
The compensation consultant works at the direction of the CMD
Committee and maintains regular contact with the CMD Committee.
Periodically the CMD Committee meets with the compensation
consultant without the presence of management, as well as in
executive session. Mercer also advises the NCG Committee on the
companys Non-Employee Director compensation program from
time to time. The CMD Committee does not believe that this
service to the NCG Committee compromises Mercers ability
to provide the CMD Committee with an independent perspective on
Macys executive compensation program.
Role of
Management
To help it perform its responsibilities, the CMD Committee makes
use of company resources, including the Vice Chair who oversees
the human resources function and senior executives in
Macys human resources, legal and finance departments.
These individuals provide input and make proposals regarding the
design, operation, objectives and values of the various
components of compensation in order to provide appropriate
performance and retention incentives for the senior management
group, including the Named Executives. These proposals may be
made at the initiative of the executives or upon the request of
the CMD Committee. These executives may attend and contribute to
CMD Committee meetings from time to time as requested by the CMD
Committee or its chairman.
26
Mr. Lundgren participates actively in the executive
compensation program process. At the beginning of a fiscal year,
Mr. Lundgren meets with each of his direct reports,
including the other Named Executives, to set their individual
performance objectives for the year. These objectives consist of
matters such as meeting key financial and other business goals
and effectively managing their business practice or corporate
function. At the end of the fiscal year, Mr. Lundgren
reviews the performance of each of his direct reports against
company and individual performance objectives and the
individuals contribution to Macys financial
performance. Mr. Lundgren takes an active part in CMD
Committee discussions of compensation involving his direct
reports, including the other Named Executives. He provides
recommendations and input on such matters as individual
performance, tenure and the size, scope and complexity of their
positions and recommendations on changes to the compensation for
the other Named Executives. Human resources executives, with
Mercers assistance, provide the CMD Committee with data
and analyses and annually prepare information to help the CMD
Committee in its consideration of such recommendations.
Mr. Lundgren does not participate in the portions of CMD
Committee meetings during which the CMD Committee discusses
changes to his compensation.
Compensation
Review
With respect to the Named Executives, the CMD Committee annually
reviews base pay, annual bonus payments and equity awards at its
March committee meeting, at which time all financial results for
the prior fiscal year for the company are available and
individual and company performance against financial targets can
be measured. As explained below, total compensation for this
group generally is targeted to fall between the 50th and
75th percentiles of market practice.
The CMD Committee periodically reviews the ongoing
competitiveness of Macys compensation program to test how
well actual compensation levels reflect the targeted market
position and promote Macys compensation philosophy. As a
general rule, the CMD Committee reviews a comprehensive
comparative analysis prepared by Mercer with respect to
Mr. Lundgren every year and with respect to the other Named
Executives approximately every three years. In addition, in
evaluating the compensation of the Named Executives, the CMD
Committee also takes into account the executives time in
position, pay history and the value contributed by that position
and the executive and reviews the compensation of other senior
Macys executives to ensure that the compensation is
internally consistent and equitable at all management levels.
For Mr. Lundgren and the companys Vice Chairs, the
CMD Committee compares executive compensation levels with proxy
data reported by a group of major retailers and vendors with
revenues and market values comparable to Macys and which
compete with Macys for executive talent. This group
includes multi-line retailers, specialty apparel retailers, and
apparel, accessories and luxury goods wholesalers. As a
secondary test against the market, the CMD Committee compares
Mr. Lundgrens compensation to the proxy data for
chief executive officers reported by a peer group of consumer
products companies that manage national brands and have revenues
ranging from $10 to $60 billion. The data includes base
salary, short-term and long-term incentives and actual and
target total compensation levels for the relevant positions.
These resources provide a realistic picture of the current
compensation trends and levels of positions to which a
Macys executive could be attracted and from which outside
talent, if needed, would be recruited. The component companies
of both peer groups are listed below.
27
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Retailer and Vendor Peer Group
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Abercrombie & Fitch
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Kohls
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SuperValu
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Ann Taylor Stores
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Kroger
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Talbots
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Best Buy
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Limited Brands
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Target
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Dillards
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Liz Claiborne
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TJX Companies
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Gap
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Nordstrom
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VF Corp
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J.C. Penney
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Polo Ralph Lauren
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Wal-Mart
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Jones Apparel Group
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Sears Holdings
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Consumer Products Peer Group
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3M
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General Mills
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PepsiCo
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Anheuser Busch
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Johnson & Johnson
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Procter & Gamble
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Colgate Palmolive
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Kimberly Clark
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Sara Lee
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Coca-Cola
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Kraft
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Four companies that appeared in the retailer and vendor peer
group in fiscal 2006 (Neiman Marcus, Gucci, LVMH and Burberry)
were not included in fiscal 2007 analyses because proxy
compensation data was no longer available for them.
For Mrs. Hoguet, the CMD Committee reviews analyses and
summaries of chief financial officer compensation data prepared
by Mercer based on compensation information reported in retail
and general industry surveys published by various survey
providers, including Hay, Hewitt, Mercer and Towers Perrin.
These surveys contain compensation data for chief financial
officers for dozens, and in some cases hundreds, of companies.
The results of the compensation reviews conducted in fiscal 2007
for Mr. Lundgren and in fiscal 2006 for the other Named
Executives indicated that the compensation levels of the Named
Executives were within the targeted pay positions.
Mr. Lundgrens compensation was between the
50th and 75th percentiles of the peer group of
retailers and vendors, but below the median of the consumer
products peer group. The compensation of the other Named
Executives was between the 50th and 75th percentile of
the retail and vendor proxy data for the Vice Chairs and the
retail and general industry survey data for Mrs. Hoguet.
EXECUTIVE
COMPENSATION PROGRAM ELEMENTS
Macys executive compensation program offers a balanced
approach to compensation and includes the primary components
outlined in the table below. This program is based on the
fundamental premise of pay-for-performance, but each element has
its own purpose. Many of the plans or programs in which the
Named Executives participate are open to a broader leadership
group or to the full employee population. Individual
compensation packages and the mix of base salary, annual cash
bonus opportunity and long-term stock incentives for each Named
Executive vary depending upon the executives level of
responsibilities, potential, performance and tenure with the
company. The portion of total compensation that is at risk
(i.e., that varies based on performance) generally increases as
an executives level of responsibility increases.
28
Overview
of Key Compensation Elements for the Named Executives
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Element
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Purpose
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Description
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Eligibility
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Base Salary
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Market-driven base-line compensation; not contingent upon
achievement (other components compensate for achievement);
amount recognizes differences in positions and/or
responsibilities as well as experience and individual
performance over the long term.
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Fixed portion of pay
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All employees.
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Performance-Based Bonus
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Aligns compensation with business strategy and operating
performance by awarding achievement of annual financial targets
and, in some cases, individual performance.
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Annual cash award
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Broad leadership level group, including the Named Executives.
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Long-Term Incentives
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Opportunities for ownership and financial reward in support of
the companys longer-term financial goal of stock price
growth; also supports retention and, consequently, succession
planning.
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Stock options
Restricted stock
Stock credits
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Broad leadership level group, including the Named Executives. Senior management group, including the Named Executives. Senior management group, including the Named Executives.
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Broad-Based Benefits
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Comprehensive health and financial protection programs to
support the well being of employees and their families.
Merchandise discount that creates brand loyalty.
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Medical and dental plans and various insurance plans, including
disability and life insurance; paid holidays and time off;
merchandise discount.
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All full-time employees.
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29
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Element
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Purpose
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Description
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Eligibility
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Management-Level Benefits
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Limited financial and perquisite benefits to recognize
leadership level.
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Deferred compensation plan; additional executive merchandise
discount.
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Select leadership level group, including the Named Executives.
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Financial planning; automobile program; and business luncheon
club membership.
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Senior management group, including the Named Executives.
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Use of corporate airplane.
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CEO; one other executive on a limited basis.
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Retirement Benefits
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Contribution to retirement savings; reward for sustained and
significant service to the company
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Cash account pension
plan and 401(k) profit
sharing plan.
Supplementary
retirement plan.
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All full-time
employees.
Select leadership level
group, including the
Named Executives.
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Compensation
Mix
Because of the ability of executive officers to directly
influence Macys overall performance, and consistent with
its philosophy of linking pay to performance, the CMD Committee
allocates a significant portion of the Named Executives
compensation to performance-based, short- and long-term
incentive programs to assure that the company meets its
objective of providing executive pay packages with the
appropriate short- and long-term incentives. Total compensation
and the amount of each element are driven by the design of the
companys compensation plans, the executives years of
experience, the scope of his or her duties and internal
comparability. The CMD Committee applies the same policies and
methodologies in setting the principal components of
compensation for Mr. Lundgren as it applies for the other
Named Executives. However, Mr. Lundgrens compensation
targets are higher than those for the other Named Executives,
which is in line with market data for the chief executive
officer position and his responsibilities as chief executive
officer.
The CMD Committee has established guidelines for annual
performance-based bonuses and for long-term incentive awards.
The chart below shows the mix of compensation that would be
payable to the Named Executives on average over time at these
award guideline levels, factoring in current salary rates as
well as the Change in Pension Value and Non-qualified
Deferred Compensation Earnings and All Other
Compensation amounts from the 2007 Summary Compensation
Table. The values broadly reflect how the CMD Committee
structures Macys compensation program over time to support
the companys pay-for-performance compensation philosophy.
Based on the combination of the annual performance-based bonus
and long-term award guidelines, almost 75% of
Mr. Lundgrens total compensation is tied to financial
performance
and/or stock
price performance. For the other Named Executives, on average,
more than 50% of total compensation is tied to financial
performance
and/or stock
price performance. These ratios are consistent with Macys
compensation philosophy of focusing on results and strategic
initiatives and fostering a pay-for-performance culture.
30
As the chart below shows, the value of the long-term award
guideline for Mr. Lundgren is almost three times the value
of the annual performance-based bonus at target. For
the other Named Executives, the value of the long-term award
guidelines is almost two times the value of the annual
performance-based bonus at target. The CMD Committee
believes that these ratios encourage the Named Executives to
focus on Macys long-term performance.
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Not Tied to Financial Performance and/or
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Tied to Financial Performance and/or
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Stock Price Performance
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Stock Price Performance
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Changes in
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Long-Term and
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Pension and
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All Other
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Annual Bonus at
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Equity
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Salary
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Deferred
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Compensation
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Subtotal
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Target
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Compensation
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Subtotal
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Total
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T. Lundgren
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13
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%
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11
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%
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2
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%
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26
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%
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|
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20
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%
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54
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%
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74
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%
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100
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%
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Average of the other Named Executives
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26
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%
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14
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%
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2
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%
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|
42
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%
|
|
|
20
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%
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|
|
38
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%
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|
|
58
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%
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100
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%
|
For fiscal 2007, the compensation guidelines shown above were
supplemented by the special retention stock option and
restricted stock grants made on March 1, 2007 to
Mr. Lundgren in connection with his new employment
agreement that are described in greater detail in the section
entitled Special 2007 Retention Grants.
Base
Salary
Base salaries are designed to provide a level of cash
compensation that is externally competitive in order to attract
and retain executive talent and to compensate an individual for
his or her level of responsibility and performance. The CMD
Committee decisions regarding an individuals base salary
take into account external factors, such as inflation, and
internal factors, including:
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division
and/or
company performance;
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the individuals current salary and, if applicable, the pay
range for the position;
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the individuals current and historical performance and
contribution to Macys performance;
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the individuals future potential with Macys;
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the individuals role and unique skills; and
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consideration of external market data for similar positions,
adjusted for Macys size, the scope of responsibilities and
the uniqueness of the role.
|
Macys utilizes base pay ranges for the chief financial
officer and executive levels below that position, based upon
position and responsibilities and market and competitive data,
as described above. The CMD Committee periodically reviews base
pay ranges, most recently in fiscal 2006. The CMD Committee
adopted new base pay ranges for fiscal 2007 to reflect the
integration of 400 stores acquired in the May acquisition. Base
salaries of the other Named Executives are managed individually
without using a base pay range.
Following the close of the fiscal year, the CMD Committee, with
input from the full Board, conducts an annual performance review
for Mr. Lundgren. Mr. Lundgren conducts an annual
performance review for the other Named Executives. The CMD
Committee bases its decisions about whether to increase base
salaries and, if so, by how much, on a number of factors,
including those listed above and, for Mrs. Hoguet, the
position of her salary within the base salary range established
for the chief financial officer position. The CMD Committee
reviews preliminary recommendations for annual increases at its
February meeting and final recommendations at its March meeting.
Annual increases in base salary normally take effect on
April 1st of
31
each year. In connection with the March 1 renewal of his
employment agreement, Mr. Lundgrens annual base
salary increase became effective on March 1, 2007.
Fiscal 2007 Action: Following the conclusion
of fiscal 2006, management, with input from Mercer and
Mr. Lundgren, prepared for the CMD Committee a summary of
the current total compensation package for each Named Executive
and a proposed total compensation package for fiscal 2007 for
each that reflected recommended increases in base salaries. In
conjunction with its consideration of these recommendations, the
CMD Committee considered the contributions of each Named
Executive to the advancement of the integration process related
to the May merger, the increased size of the company following
the May merger, the salaries of the Vice Chairs relative to that
of Mr. Lundgren and to each other, and considered the other
factors listed above with respect to each Named Executive. The
CMD Committee also considered the results of its annual
performance review of Mr. Lundgren and of
Mr. Lundgrens annual review of the individual
performance of the other Named Executives.
Following its review, the CMD Committee approved the following
base salary rate increases, effective March 1, 2007 for
Mr. Lundgren and April 1, 2007 for the other Named
Executives:
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|
2007 Annual Increase in
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Base Salary Rate
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$
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% of Base Salary
|
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|
T. Lundgren
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100,000
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7.1
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%
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K. Hoguet
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|
50,000
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6.7
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%
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T. Cole
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|
75,000
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|
8.3
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%
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J. Grove
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75,000
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8.3
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%
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S. Kronick
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50,000
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|
4.8
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%
|
Annual
Performance-Based Bonus
The Named Executives participate in the 1992 Bonus Plan. The
1992 Bonus Plan is a non-equity incentive plan under
current SEC rules. It is designed to align a significant portion
of the pay of Macys senior executives with Macys
annual performance. The 1992 Bonus Plan provides an opportunity
for senior executives, including the Named Executives, to earn a
targeted percentage of base salary based on Macys
performance results against performance measures set by the CMD
Committee at the beginning of the fiscal year. No bonus will be
paid if Macys does not achieve a net profit for the year,
excluding restructuring charges and extraordinary items. The CMD
Committee may exercise discretion to reduce, but not to
increase, the amount of a bonus awarded under the 1992 Bonus
Plan. In fiscal 2007, the CMD Committee did not exercise this
discretion.
32
Each year the Board and management create a challenging
financial and operating business plan for the company. The CMD
Committee sets the performance measures each year for the 1992
Bonus Plan based on the companys business plan. The CMD
Committee may select one or more of the following performance
measures under the 1992 Bonus Plan:
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|
Total sales
|
|
EBIT
|
|
Cash flow
|
|
Net cash provided by operations
|
Comparable store sales
|
|
EBITDA
|
|
Return on investment
|
|
Total shareowner return
|
Gross margin
|
|
Net income
|
|
Stock price appreciation
|
|
Customer satisfaction
|
Operating or other expenses
|
|
Earnings per share
|
|
Operating income
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|
|
For fiscal 2007, the CMD Committee selected EBIT (earnings
before interest and taxes), sales and cash flow as the
performance measures to determine bonuses under the 1992 Bonus
Plan. The CMD Committee believes that rewarding the executives
for strong performance measured by the combination of these
three measures will support the business plan and give
executives a strong incentive to focus on the business in a
balanced way. The CMD Committee gave the greatest weight and
bonus potential to the EBIT measure, which focuses the
executives on maximizing operating income. The CMD Committee
believes that increasing operating income is a significant way
for executives to create value for the companys
stockholders. The CMD Committee gave lesser, yet significant
weight and bonus potential to the sales and cash flow measures.
The CMD Committee believes that emphasizing sales and cash flow
provide balance. Top-line sales are a measure of growth and
provide opportunities for the achievement of various other
financial measures, including EBIT and cash flow. Cash flow is
indicative of the manner in which the companys operating
activities, together with its investing activities, actually
generate cash. How a company increases its cash flow and then
chooses to invest the cash are among the most important
decisions management makes.
The CMD Committee sets the specific performance targets under
the 1992 Bonus Plan so that the executives will receive the
target level of bonus if the company achieves
plan under each of the EBIT, sales and cash flow
measures. The sales target under the 1992 Bonus Plan excludes
external sales adjustments, including delivery revenue and
leased department income. Macys does not disclose its
business plan or the components thereof because they constitute
confidential business information that could impair Macys
ability to compete effectively in the retail market place.
However, by setting the target level of bonus based
on achieving the plan level of performance, the CMD
Committee believes the performance targets are challenging based
on historical company performance and industry and market
conditions. The maximum award target levels for the
performance measures reflect very ambitious goals that are
attainable only when business results are exceptional and well
above Macys business plan. Over the last six years, the
company has achieved performance below the threshold
level of performance twice, between threshold and
target once, and in excess of target
three times. The company did not achieve performance that met or
exceeded the maximum level of performance during
that period. The Named Executives would be entitled to the
following percentages of base pay for achieving the following
threshold, target and
maximum levels of performance.
33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Bonus as a % of Base Pay
|
|
Position
|
|
Component
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Chief Executive Officer
|
|
EBIT $
|
|
|
18
|
%
|
|
|
90
|
%
|
|
|
No maximum
|
|
|
|
Sales $
|
|
|
10
|
%
|
|
|
30
|
%
|
|
|
60
|
%
|
|
|
Cash Flow $
|
|
|
12
|
%
|
|
|
30
|
%
|
|
|
60
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
40
|
%
|
|
|
150
|
%
|
|
|
No maximum
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Named Executives
|
|
EBIT $
|
|
|
9
|
%
|
|
|
45
|
%
|
|
|
No maximum
|
|
|
|
Sales $
|
|
|
5
|
%
|
|
|
15
|
%
|
|
|
30
|
%
|
|
|
Cash Flow $
|
|
|
6
|
%
|
|
|
15
|
%
|
|
|
30
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
20
|
%
|
|
|
75
|
%
|
|
|
No maximum
|
|
The CMD Committee sets the levels of annual bonus payable at the
threshold, target and
maximum levels of performance for Mr. Lundgren
and the other Named Executives based on the factors described
above. See Executive Compensation Program
Design Compensation Review and Executive
Compensation Program Elements Compensation Mix.
Annual incentive bonuses are submitted to the CMD Committee for
approval at its March meeting. Annual incentive bonuses are
determined as a percentage of the executives base salary
as of the last day of the fiscal year. Bonus percentages are
interpolated for performance results falling between
threshold and target and between
target and maximum for the applicable
performance component, as measured against the companys
business plan for those components. If a performance component
has no maximum level of performance and performance exceeds the
target level of performance, the annual bonus will be calculated
at a rate established by the CMD Committee for above-target
performance. For purposes of determining performance results,
the calculations of EBIT, sales and cash flow performance are
adjusted to exclude the following:
|
|
|
|
|
extraordinary items (as determined under generally accepted
accounting principles, referred to as GAAP);
|
|
|
|
changes in accounting principles (as determined under GAAP); and
|
|
|
|
income, gains, expenses, losses, cash inflows and cash outflows:
|
|
|
|
|
|
resulting from unusual or nonrecurring items (as reported in the
Companys quarterly earnings releases and filings with the
SEC and reviewed by KPMG LLP);
|
|
|
|
from discontinued operations (as determined under GAAP);
|
|
|
|
attributable to any division, business segment, material
business operation, subsidiary, affiliate or material group of
stores that are acquired during the year;
|
|
|
|
from the sale or disposition of any division, business segment,
material business operation, subsidiary, affiliate or material
group of stores; and
|
|
|
|
resulting from material restructuring charges (as reported in
the Companys quarterly earnings releases and filings with
the SEC and reviewed by KPMG LLP).
|
Fiscal 2007 Action: Prior to fiscal 2007,
participants in the 1992 Bonus Plan received no bonus for the
sales performance measure when actual sales fell
below the target level of performance. At the end of
34
fiscal 2006, the CMD Committee asked management to explore two
changes to the 1992 Bonus Plan: (i) adding a
threshold bonus opportunity to the sales
component and (ii) placing a maximum on the amount of the
bonus that can be earned for the EBIT component.
After reviewing with Mercer the advantages and disadvantages of
making these changes, management proposed that executives
receive a threshold bonus for the sales
component equal to one-third of the target
opportunity for that component. Management believed that this
would allow for more aggressive sales planning on the part of
the executives without putting the entire sales
component at risk. Management determined that placing a maximum
on the EBIT component might discourage stretch
performance for such a key performance measure and decided not
to recommend that change. Consequently, for the 2007 fiscal
year, in order to encourage more aggressive sales plan
strategies, the CMD Committee approved a change in the
threshold level of performance for the
sales performance measure, at 10% for
Mr. Lundgren and 5% for the other Named Executives.
The CMD Committee reviewed performance data at the end of fiscal
2007 with management at its March 2008 meeting and determined
that Macys performance fell below the
threshold level for each performance measure.
Consequently, none of the Named Executives received an annual
bonus for fiscal 2007:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonus Payout for fiscal 2007 as a% of Base Salary
|
|
Bonus Component
|
|
2007 Performance
|
|
|
T. Lundgren
|
|
|
Other Named Executives
|
|
|
EBIT $
|
|
|
Below Threshold
|
|
|
|
0
|
%
|
|
|
0
|
%
|
Sales $
|
|
|
Below Threshold
|
|
|
|
0
|
%
|
|
|
0
|
%
|
Cash Flow $
|
|
|
Below Threshold
|
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
0
|
%
|
|
|
0
|
%
|
The maximum permitted annual bonus payment for any year under
the 1992 Bonus Plan is $7.0 million. The Non-Equity
Incentive Plan Compensation column of the 2007 Summary
Compensation Table reflects that the Named Executives received
no annual bonuses for fiscal 2007.
Long-Term
Performance-Based and Other Equity Incentives
Each year the CMD Committee reviews the use of long-term
incentives under three long-term plans:
|
|
|
|
|
the 1995 Equity Incentive Plan, referred to as the 1995 Equity
Plan;
|
|
|
|
the 1994 Stock Incentive Plan, referred to as the 1994 Stock
Plan; and
|
|
|
|
stock credit plans adopted from time to time, referred to as the
stock credit plans.
|
Macys stockholders have approved the 1995 Equity Plan and
the 1994 Stock Plan. Approximately 1,860 executives are eligible
for equity grants, including stock options and restricted stock,
under these plans. Participation in the equity plans is based on
an executives position and that positions ability to
make a significant contribution to the companys financial
results, an executives level of responsibility and
leadership potential, individual performance and competitive
practices. The CMD Committee consults with management in
considering and determining eligibility for equity awards, the
number of shares of common stock underlying each award and the
terms and conditions of each award.
Stock Options. The 1995 Equity Plan and
the 1994 Stock Plan reflect Macys commitment to effective
management of equity-based compensation. Stock option grants are
discretionary. The CMD Committee determines grant types and
grant levels based on market data (as described above), emerging
trends and other financial considerations, including the impact
on stockholder dilution. Macys does not grant discounted
stock
35
options. The plans do not provide for the granting of
reload options and prohibit the repricing of
previously granted options.
Macys uses stock options as a long-term incentive vehicle
because:
|
|
|
|
|
Stock options align the interests of executives with those of
the stockholders, support a pay-for-performance culture, foster
employee stock ownership, and focus the management team on
increasing value for the stockholders.
|
|
|
|
Stock options are performance based. All the value received by
the recipient from a stock option is based on the growth of the
stock price above the option price.
|
|
|
|
Stock options offer a balance to the overall compensation
program, each element of which serves a specific purpose.
|
|
|
|
Stock options have retentive value and provide a long-term focus.
|
The CMD Committees use of stock options has evolved in
recent years:
|
|
|
|
|
For years prior to fiscal 2004, the CMD Committee relied almost
exclusively on stock options, and determined grants based on
guidelines that specified numbers of option shares for each
position.
|
|
|
|
In fiscal 2004, the CMD Committee determined to shift from such
a heavy reliance on stock options, and took other actions to
reduce the impact of stock options on stockholder dilution.
|
|
|
|
For fiscal years 2004 and 2005, the CMD Committee reduced option
grant levels for the Named Executives by 50%. The CMD Committee
replaced one-half of the stock option grant levels with stock
credits under the
2004-2005
stock credit plan described below in the Stock
Credits section, replacing three stock options with one
stock credit.
|
|
|
|
For fiscal years 2006 and 2007, the CMD Committee re-evaluated
how it should determine the numbers of options and stock credits
to grant to the Named Executives, concluding that Macys
should:
|
|
|
|
|
|
determine levels of options and stock credits based on grant
date dollar values rather than on numbers of shares; and
|
|
|
|
emphasize stock credits more by shifting the ratio of stock
credits to stock options from 50% / 50% to
60% / 40%.
|
Timing. The CMD Committee approves annual
stock option grants at its March meeting. The March meeting
occurs after financial results for the company are
available at least three weeks after Macys
releases its year-end earnings. In fiscal 2007, the date of the
CMD Committee meeting was March 23. Under the terms of the
equity plans, the exercise price for these stock options was set
at the closing price of Macys common stock on the NYSE on
the trading day prior to the grant date. The options vest 25%
per year over four years beginning with the first anniversary of
the grant date. In addition to the annual option grants, the CMD
Committee may approve options grants on a limited basis on other
dates in special circumstances, such as to newly hired
executives, or to executives promoted into option eligible
positions or to retain executives important to the success of
the company.
Fiscal 2007 Action: The CMD Committee based
the number of stock options granted in fiscal 2007 to each Named
Executive on a specific dollar value that was determined by the
CMD Committee in fiscal 2006.
36
In fiscal 2006, the CMD Committee approved a two-year, long-term
incentive program for the senior officers, including the Named
Executives, consisting of stock options and stock credits. To
arrive at the number of stock options and stock credits to award
in fiscal 2006 and fiscal 2007 under this program, the CMD
Committee determined the grant date dollar value of the options
granted to each Named Executive in fiscal 2004 using the
Black-Scholes option valuation method and the grant date value
of stock credits granted to each Named Executive in fiscal 2004.
The CMD Committee then calculated the number of option shares
and stock credits needed to provide the Named Executive with the
same dollar value for the two year fiscal
2006-2007
period, with 60% of the dollar value to be awarded as
core stock credits and 40% of the dollar value to be
awarded as stock options. In fiscal 2006, the CMD Committee
awarded all of the stock credits under the
2006-2007
stock credit plan (described below) and the first installment of
stock options under the 1995 Equity Plan. In fiscal 2007, the
CMD Committee awarded the second installment of stock options
under the 1995 Equity Plan.
The options comprising this second installment expire on
March 23, 2017, vest 25% on each of the first four
anniversaries of March 23, 2007, and are priced at $46.15,
which was the closing price of Macys common stock on the
NYSE on March 22, 2007.
Although the CMD Committee intended to recommend that the Board
approve the second installment of stock options for
Mr. Lundgren at the March 23rd meeting, the
formal resolutions prepared by management to approve the second
installment of options for the senior officers inadvertently
omitted the intended approval of Mr. Lundgrens grant
and, accordingly, his second installment was not implemented at
that time. On October 26, 2007, the Board determined that
the omission of the intended approval of
Mr. Lundgrens grant should be corrected. Accordingly,
on October 26, 2007, the Board, on the recommendation of
the CMD Committee, approved a grant to Mr. Lundgren of the
second installment of stock options with substantially the same
economic terms as the options granted to the other Named
Executives on March 23, 2007. The exercise price for
options is generally set at the closing price per share of
Macys common stock for the trading day immediately
preceding the date on which the stock option grant is effective.
The closing price of Macys common stock on
October 25, 2007 was $32.46 per share. However, the 1995
Equity Plan authorizes the Board to set an exercise price that
is higher than that closing price. For Mr. Lundgrens
grant, the Board set the exercise price at $46.15 per share,
which was the closing price per share of Macys common
stock on March 22, 2007 and is the exercise price that
applies to the options granted on March 23, 2007 to the
other Named Executives. This exercise price is $13.69 higher
than the closing price of Macys common stock on
October 25, 2007. Mr. Lundgrens stock options
will vest in 25% increments on each of the first four
anniversaries of March 23, 2007, which is the vesting
schedule that applies to the options granted on March 23,
2007 to the other Named Executives. His stock options expire on
March 23, 2017, which is the expiration date that applies
to the options granted on March 23, 2007 to the other Named
Executives.
The 2007 stock option grants to the Named Executives are
reflected in the 2007 Grants of Plan-Based Awards table under
Compensation of the Named Executives for 2007.
For information concerning a special retention stock option
grant made to Mr. Lundgren in fiscal 2007, see
Special 2007 Retention Grants below.
Stock Credits. In March 2004,
Macys implemented a two-year stock credit plan covering,
among other senior executives, the Named Executives. The plan
was designed to accomplish several important objectives
established by the CMD Committee with managements and
Mercers assistance, including:
|
|
|
|
|
provide an incentive to drive improvement of the Four Priorities
(as discussed below);
|
37
|
|
|
|
|
shift a portion of long-term compensation out of stock options
and into stock credits to reduce dilution and share usage;
|
|
|
|
offer a form of compensation that remains connected to stock
price performance; and
|
|
|
|
retain key executives.
|
After Mr. Lundgrens appointment as chief executive
officer in 2003, he outlined four key strategic initiatives to
reinvent the company and drive profitable top-line growth for
2004 and 2005, referred to as the Four Priorities:
|
|
|
|
|
Merchandise Assortments differentiated and better
edited assortments;
|
|
|
|
Price Simplification simplify pricing and highlight
value;
|
|
|
|
Improving the Shopping Experience make it easy,
efficient and comfortable; and
|
|
|
|
Marketing create a brand strategy and drive sales
through effective marketing.
|
To achieve those objectives, management executives would have to
change the way they managed their businesses, often with steps
that could have had a short-term negative impact on division and
corporate performance and, consequently, on annual incentive
compensation. The CMD Committee determined that the
2004-2005
stock credit plan would be an effective tool to retain
executives and keep them focused on the significant long-term
changes needed to achieve the Four Priorities.
At the end of fiscal 2005, the CMD Committee concluded that 95%
of performance-based stock credits granted under the
2004-2005
stock credit plan were earned. The remaining 5% of those stock
credits were forfeited. The value of one-half of the
performance-based stock credit balance was paid in cash on
February 4, 2008, at the rate of $24.01 per share, which
was the average closing price of Macys common stock for
the
twenty-day
period preceding the February 4, 2008 payment date. The
value of the other half will be paid in Spring 2009. Two-thirds
of the stock credits granted in 2004 were time-based. The value
of one-half of the time-based stock credit balance was paid in
cash on February 4, 2008, at the rate of $24.01 per share,
and the value of the other half will be paid in Spring 2009.
During 2005, the CMD Committee reviewed the elements of the
total compensation program for the Named Executives and
determined that stock credits continue to provide the link it
seeks to align managements compensation to Macys
performance and stockholder interests and to drive
implementation of updated Four Priorities, including the
introduction and implementation of Four Priorities at the 400
plus stores acquired in the May transaction.
On March 24, 2006, the CMD Committee authorized a new stock
credit plan for the
2006-2007
performance period and granted core stock credits and merger
stock credits to the Named Executives on that date. The grant
value of the core stock credits was based on 60% of the grant
date dollar value of the combined 2004 stock option and stock
credit grants to these executives, as described above. Fifty
percent of the core stock credits granted to the Named
Executives are time-based and 50% are performance-based, with
performance measures tied to Four Priorities updated for the
fiscal
2006-2007
performance period. The value of the merger stock credits was
approximately 33.3% of the value of the core stock credit
grants. The merger stock credits are 100% performance-based,
with performance measures tied to company-wide objectives
38
related to achieving certain financial merger synergies during
fiscal 2006 and 2007. The Named Executives each received the
following number of stock credits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core Stock Credits
|
|
|
Merger Stock Credits
|
|
|
|
Performance-Based
|
|
|
Time-Based
|
|
|
Performance-Based
|
|
|
T. Lundgren
|
|
|
99,780
|
|
|
|
99,778
|
|
|
|
66,520
|
|
Other Named Executives
|
|
|
21,926
|
|
|
|
21,924
|
|
|
|
14,616
|
|
Fiscal 2007 Action: After the conclusion of
fiscal 2007, Mr. Lundgren updated the CMD Committee on the
progress the company had made during fiscal 2006 and fiscal 2007
with respect to the updated Four Priorities and with respect to
the merger synergies objectives for the performance-based stock
credits granted in fiscal 2006. He reported that, with respect
to the core stock credits, significant progress had been made on
strategic objectives in each of the Merchandise Assortment,
Price Simplification, Shopping Experience and Marketing
categories that comprise the Four Priorities. He also reported
that, with respect to the merger stock credits, the company had
exceeded the expected $450 million in synergies resulting
from the May merger.
Based on this information, the CMD Committee evaluated the
companys performance against the performance criteria
applicable to the stock credits and determined that, for all
participants in the
2006-2007
stock credit plan, including the Named Executives:
|
|
|
|
|
95% of the performance-based core stock credits were earned;
|
|
|
|
5% of the performance-based core stock credits were
forfeited; and
|
|
|
|
100% of the merger stock credits were earned.
|
For the Named Executives, the CMD Committee determination
resulted in the following stock credits being earned:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance-Based Core
|
|
|
Performance-Based Merger
|
|
|
|
Stock Credits
|
|
|
Stock Credits
|
|
|
|
Granted
|
|
|
Earned
|
|
|
Granted
|
|
|
Earned
|
|
|
T. Lundgren
|
|
|
99,780
|
|
|
|
94,791
|
|
|
|
66,520
|
|
|
|
66,520
|
|
Other Named Executives
|
|
|
21,926
|
|
|
|
20,829
|
|
|
|
14,616
|
|
|
|
14,616
|
|
The performance-based stock credits earned by the Named
Executives as of the end of the
2006-2007
performance period and the time-based stock credits held by them
are subject to two-year and three-year holding periods. The
value of one-half of the stock credits will be paid in cash in
Spring 2010 and the value of the other half will be paid in
Spring 2011.
Fiscal 2008 Action: Following the conclusion
of fiscal 2007, the CMD Committee, with the assistance of Mercer
and management, reviewed the elements of the total compensation
program for the Named Executives. It reviewed recent Macys
compensation practices, incentive plan practices among the
retailer and vendor peer group listed in the compensation review
discussion and general industry trends. The CMD Committee
approved a new two-year, long-term incentive program for the
senior officers, including the Named Executives, consisting of
stock options and stock credits. Similar to the fiscal
2006-2007
long-term incentive program, the ratio of stock credits to stock
options under the new fiscal
2008-2009
program will be approximately 60% stock credits to 40% stock
options. The stock credits awarded to the Named Executives under
the
2008-2009
stock credit plan will be awarded in fiscal 2008. They will be
100% performance based and will include core stock credits and
My Macys/Consolidation stock credits.
39
At the conclusion of fiscal 2009, the Committee will:
|
|
|
|
|
with respect to the core stock credits, evaluate Macys
performance in fiscal years 2008 and 2009 against established
objectives based on updated Four Priorities (Merchandise
Assortments, Price Simplification, The Shopping Experience and
Marketing); and
|
|
|
|
with respect to the My Macys/Consolidation stock credits,
evaluate Macys performance in fiscal 2008 and fiscal 2009
against objectives established by the CMD Committee at the
beginning of each fiscal year based on sales objectives
associated with the companys My Macys initiative and
financial objectives associated with savings anticipated from
the consolidations of three operating divisions.
|
Based upon that evaluation of Macys performance, the
Committee will determine the percentage (from 0% up to 100%) of
each type of stock credits that are earned by the participants.
Stock credits that are not earned will be forfeited. The value
of one-half of the earned stock credits held by participants
will be paid in cash in Spring 2012 and the value of the other
half of such stock credits will be paid in cash in Spring 2013,
the value being determined in each case on the basis of the
then-current
20-day
average closing price of Macys common stock. In general,
each stock credit is intended to represent the right to receive
the value associated with one share of Macys common stock,
including dividends paid on shares of Macys common stock
during the period from the end of fiscal 2009 until such stock
credit is settled in cash.
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
|
Performance
|
|
|
|
Credit
|
|
Earning Criteria
|
|
Period
|
|
|
Payout of Earned Benefit
|
|
Performanced-Based Core
|
|
100% based on performance against the Four Priorities
|
|
|
2008-2009
|
|
|
50% in 2012
|
|
50% in 2013
|
My Macys/ Consolidation
|
|
50% based on sales performance objectives relating to My
Macys initiative
|
|
|
2008; 2009
|
|
|
50% in 2012
|
|
50% in 2013
|
|
|
50% based on financial measures related to consolidation
objectives
|
|
|
2008; 2009
|
|
|
50% in 2012
|
|
50% in 2013
|
The Named Executives received the following number of stock
credits on March 21, 2008 pursuant to the
2008-2009
stock credit plan:
|
|
|
|
|
|
|
|
|
|
|
Performance-Based
|
|
|
My Macys/Consolidation
|
|
|
|
Core Stock Credits
|
|
|
Stock Credits
|
|
|
T. Lundgren
|
|
|
291,187
|
|
|
|
97,062
|
|
Other Named Executives
|
|
|
63,983
|
|
|
|
21,327
|
|
Restricted Stock. The CMD Committee
does not have a regular program of granting restricted stock
under the 1995 Equity Plan or the 1994 Stock Plan. It may grant
restricted stock from time to time for retention and performance
reasons. Restricted stock grants under the two plans can be
either time-based or performance-based. For more information
about restricted stock, see the restricted stock discussion
following the 2007 Grants of Plan Based Awards
table. Restricted stock grants typically are approved by the CMD
Committee at its March meeting and are granted as of that day.
In addition, the CMD Committee may approve special restricted
stock grants on other dates in special circumstances, such as to
retain executives important to the success of the company.
Restricted stock can complement stock options. Stock options
work well (that is, they provide incentives) when the fair
market value of the stock is above or slightly below the
exercise price of the options. However, stock options do not
work as well (that is, they provide little or no incentive) if
the fair market value of the stock underlying the options falls
significantly below the exercise price of the options. On the
other hand,
40
restricted stock can continue to work well even if the fair
market value of the stock falls significantly below the value on
the grant date.
Fiscal 2007 Action: Since the CMD Committee
does not make annual grants of restricted stock,
there were no annual grants in fiscal 2007. However,
for information concerning a special retention restricted stock
grant to Mr. Lundgren, see Special 2007 Retention
Grants below.
Special
2007 Retention Grants
Over the course of several meetings at the end of fiscal 2006
and the beginning of fiscal 2007 the CMD Committee explored
granting additional equity to Mr. Lundgren as a retention
device and to provide him additional incentive to continue to
develop Macys as a nationwide brand following
the merger with May. Since Mr. Lundgrens employment
agreement was set to expire in February 2007, the CMD Committee
determined that any additional grants could be coordinated with
the offer of a new employment agreement. To assist the CMD
Committee in setting the size and components of the retention
grants, Mercer prepared materials for the meetings that included
the following information:
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|
|
|
|
illustration of baseline compensation under the current
compensation program for Mr. Lundgren before the impact of
any additional equity grants;
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|
|
examples of special equity awards to chief executive officers at
other companies in Mercers 350 company database;
|
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|
|
alternatives for additional equity grants, including options
only, combinations of options and time-vested restricted stock,
and combinations of options and performance-based restricted
stock; and
|
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|
|
a comparison of the alternatives described above to retention
awards made in June 2006 to the other Named Executives.
|
In addition, the CMD Committee reviewed tally sheets prepared by
management that showed Mr. Lundgrens historical
compensation, the value of unvested equity and potential
payments to Mr. Lundgren under various employment
termination scenarios. After reviewing this material and
comparing Macys total stockholder return performance since
Mr. Lundgren became the chief executive officer in 2003
against the performance of the retail peer group used for
compensation reviews and the S&P 500 Index, the CMD
Committee determined that a grant of 500,000 stock options and
75,000 shares of time-based restricted stock, having an
aggregate value of approximately 7.0 times
Mr. Lundgrens base salary, would provide the
retention value and additional incentive that it sought and that
such grants would be within the range of market practice for
retention grants at the chief executive officer level.
Consequently, on March 1, 2007, the CMD Committee approved
special grants to Mr. Lundgren under the 1995 Equity Plan
of 500,000 stock options and 75,000 shares of restricted
stock. The CMD Committee set the grant date to be after the
company had issued press releases reporting its year-end
earnings and January sales. The stock options have a term of ten
years and an exercise price of $44.67. Both the shares of
restricted stock and the stock options vest 100% on
February 28, 2011.
Benefits
Macys provides benefits based upon an assessment of
competitive market factors and a determination of what is needed
to attract and retain high caliber executives. Macys
primary benefits for executives include participation in the
companys broad-based plans: the cash account pension plan;
the 401(k) profit sharing
41
plan; the companys health and dental plans and various
other insurance plans, including disability and life insurance;
and Macys matching gift program.
Macys also provides the following benefits to the Named
Executives:
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Supplementary Retirement Plan Macys provides a
supplementary retirement plan to eligible executives described
under Compensation of the Named Executives for
2007 Post Retirement Compensation. The
Supplementary Retirement Plan supplements the pension benefits
provided under the cash account pension plan, and takes into
account compensation that the tax rules do not permit the cash
account pension plan to take into account. In addition, it
supports Macys pay-for-performance culture by rewarding
better performance with increased retirement benefits payable to
eligible executives whose bonus compensation would otherwise not
be taken into account under the broad-based cash account pension
plan. The Named Executives are taxed on supplementary retirement
benefits when those benefits are paid.
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|
Deferred Compensation Plan Macys provides
executives the opportunity to defer receiving income until after
they terminate their employment. This benefit offers tax
advantages to eligible executives, permitting them to defer
payment of their compensation and defer taxation on that
compensation until after termination. The deferred compensation
plan is described under the heading Compensation of the
Named Executives for 2007 Post Retirement
Compensation Non-qualified Deferred Compensation
Plans.
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Financial Counseling Macys pays for financial
counseling services, the cost of which depends upon the
compensation level of the executive. The Named Executives
receive imputed income for fees paid for the services. This
benefit provides the Named Executives with access to an
independent financial advisor who is familiar with the
Macys compensation and benefits programs and can provide
the services efficiently and at the convenience of the
executives, helping them focus more of their time on the
companys business.
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Automobile Program Macys provides the Named
Executives a choice of a car lease or an automobile allowance.
This benefit is an additional form of compensation to the Named
Executives. The car lease option includes insurance, maintenance
and fuel. It provides the Named Executives with an opportunity
to use a company-provided car for both business and personal
use. Where Macys facilities do not have free parking, they
also receive a parking allowance. This benefit helps put the
Named Executives on an even level with executives in the car
program who work in locations with free parking. The company
reports imputed income for income tax purposes for all
company-paid expenses. Mr. Lundgren participated in the
automobile program in fiscal 2007. He will no longer participate
in the program beginning in fiscal 2008.
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Car and Driver Program Pursuant to an independent
third-party security study Macys obtained in 2007,
Macys is providing Mr. Lundgren with a
specially-equipped car and driver for commuting in New York
City, for certain business travel and for personal use. The
driver is a trained security professional. This benefit is both
for security and to ensure the personal safety of
Mr. Lundgren, who maintains a significant public role as
the leader of Macys. The benefit also allows
Mr. Lundgren to work productively during his commute. For
tax purposes, with respect to any commuting to and from work and
any personal use of the car and driver by Mr. Lundgren, the
costs relating to the service are imputed as income.
|
42
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|
Business Luncheon Club The Named Executives are
entitled to company-paid memberships at business luncheon clubs
for the purpose of conducting business on behalf of Macys.
Any meal or other expenses incurred at the clubs that are not
business-related are the responsibility of the Named Executive.
This benefit provides the Named Executives with access to
congenial and helpful settings for business lunches and
encourages them to use those locations for business lunches with
vendors and other business related meetings.
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|
|
Additional Executive Discount All regular employees
are eligible for a base merchandise discount. The Named
Executives are eligible for an additional discount on top of the
base discount for a total discount of 40%. They are reimbursed
for estimated taxes on imputed income associated with the
additional discount. This benefit provides the company with a
unique competitive advantage in attracting, retaining and
motivating executive talent.
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|
Company Airplane Mr. Lundgren is permitted to
use company-owned aircraft for personal flights as well as
business flights. This benefit increases the level of safety and
security for Mr. Lundgren and his family. In addition,
making the aircraft available to Mr. Lundgren allows him to
efficiently and securely conduct business during both business
and personal flights. Furthermore, given the delays today
associated with early check-in requirements, security
clearances, baggage claim and the need for additional time to
avoid missing a flight due to possible delays at any point in
the process, commercial travel has become even more inefficient
in recent years, and making the aircraft available to
Mr. Lundgren maximizes his availability to conduct business
both before and after his flights. Finally, Macys believes
that the value to Mr. Lundgren of making the aircraft
available for Mr. Lundgren and his family, in terms of
convenience and saving of time, is greater than the incremental
cost that Macys incurs to make the aircraft available and
therefore is an efficient form of compensation for him. One
other executive is permitted to use company-owned aircraft for
personal flights for up to a total of 25 hours of in-flight
time per six-month period, under a former corporate aircraft
policy that continues to apply to him. The company reports
imputed income for income tax purposes for the value of any
personal use based on the Standard Industry Fair Level (SIFL) in
accordance with the Internal Revenue Code and Treasury
Regulations.
|
Deductibility
The CMD Committee considers the deductibility for federal income
tax purposes under Section 162(m) of the Internal Revenue
Code in the design of Macys compensation programs.
Section 162(m) places a limit of $1 million on the
amount of compensation that Macys may deduct in any one
year with respect to the Named Executives to whom
Section 162(m) applies. There is an exception to the
$1 million limitation for performance-based compensation
meeting certain requirements defined by the IRS. Annual
non-equity incentive plan compensation, stock option awards and
performance-based restricted stock awards generally are
performance-based compensation meeting those requirements and,
as such, are fully deductible. The CMD Committee has taken the
necessary actions to maximize the deductibility of payments
under Macys 1992 Bonus Plan and of awards under its two
equity plans. However, the CMD Committee may elect to provide
compensation that is not deductible in order to achieve its
compensation objectives. Consequently, portions of the total
compensation program may not be deductible under
Section 162(m), including the portion of base pay of some
of the Named Executives in excess of $1 million, time-based
restricted stock and stock credit awards.
43
The following table outlines which types of payment retain
deductibility when the $1 million threshold is exceeded:
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|
|
Deductible
|
|
|
Not Deductible
|
|
|
Base Salary
|
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|
|
|
|
|
x
|
|
Annual Incentive Bonus
|
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x
|
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|
|
|
Stock Options
|
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|
x
|
|
|
|
|
|
Time-Based Restricted Stock
|
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|
|
|
|
|
x
|
|
Performance-Based Restricted Stock
|
|
|
x
|
|
|
|
|
|
Stock Credits
|
|
|
|
|
|
|
x
|
|
Section 409A
Section 409A of the Internal Revenue Code requires that
nonqualified deferred compensation arrangements must meet
specific requirements. Failure to meet these requirements
results in immediate taxation of certain deferred amounts, as
well as an additional tax equal to 20% of such deferred amounts
and an interest penalty. Macys has reviewed, or is in the
process of reviewing, its executive compensation plans and
arrangements to ensure their compliance with Section 409A
by the required December 31, 2008 deadline.
Section 280G
Section 280G and related sections of the Internal Revenue
Code provide that executive officers could be subject to
significant additional taxes if they receive payments or
benefits that exceed certain limits in connection with a
change-in-control
event. Macys does not provide any executive officer or
director with a commitment to
gross-up or
reimburse tax amounts that the executive might pay pursuant to
Section 280G.
Accounting
In its financial statements, Macys records salaries and
performance-based compensation incentives as expenses in the
amount paid, or to be paid, to the Named Executives. Accounting
rules also require Macys to record an expense in its
financial statements for equity-based awards, even though equity
awards are not paid as cash to employees. Macys expenses
all equity-based awards in accordance with FAS 123R.
Macys has not implemented any significant changes in its
executive compensation program design as a result of
FAS 123R.
Change-in-Control
Agreements
Macys equity programs and deferred compensation programs
provide for accelerated benefits in the event of a change in
control, which affect all participants in those programs as well
as the Named Executives. When a change in control occurs, stock
options, restricted stock and stock credits issued under the
2006-2007
stock credit plan immediately vest for all holders and phantom
stock and cash account balances under the deferred compensation
plan immediately become payable. This reassures executives that
they will receive previously deferred compensation and that
prior equity grants will be honored because decisions as to
whether to provide these amounts are not left to the management
and directors in place following a change in control.
In addition to the above benefits, certain senior executives,
including the Named Executives, have
change-in-control
arrangements. The CMD Committee believes that these arrangements
are an important part of the total executive compensation
program because they help to attract and retain the caliber of
executive that Macys needs in its most senior positions.
The agreements are intended to assist with retention during any
44
rumored or actual change in control where continuity is key to
preserving the value of the business. The agreements are also
intended to preserve executives neutrality toward a
potential
change-in-control
transaction and keep them focused on minimizing interruptions in
business operations by reducing any concerns they may have of
being terminated prematurely and without cause during an
ownership transition.
The arrangements for the Named Executives provide that if,
following a change in control, the executive is terminated for
any reason, other than death, disability or for cause, or the
executive terminates his or her employment for good
reason, then the executive is entitled to benefits
described under the heading Compensation of the Named
Executives for 2007 Potential Payments upon
Termination or Change in Control.
Fiscal 2007 Action: The
change-in-control
agreements for the Named Executives were set to expire on
November 1, 2007. The CMD Committee asked Mercer and its
outside legal counsel to undertake a review of the agreements to
assess the reasonableness of the benefits and provisions of the
agreements relative to average industry practices and to advise
it on the pros and cons of adopting various alternative
approaches to the
change-in-control
agreements, including whether the company should eliminate the
agreements completely for some or all executives, renew the
agreements for one year with no changes other than those
required by or advisable under Section 409A of the Internal
Revenue Code, or renew the agreements and update them to reflect
current practice and the requirements of Section 409A.
Mercer, with the assistance of management, prepared a summary of
the change in control benefits at Macys and projected the
benefits for a cross section of senior executives. Mercer, with
the assistance of Macys outside legal counsel, looked at
market practices among retail peer companies and general
industry and the trends and practices supported by stockholder
advisory groups and prepared an assessment of the pros and cons
of each alternative approach. The retail companies in the review
included Wal-Mart, Sears, Best Buy, Dillards, Limited
Brands, Kohls, Nordstrom, Polo Ralph Lauren, Gap, Kroger,
Target, TJX Companies, J.C. Penney, Jones Apparel Group, Liz
Claiborne, Saks, Supervalu and VF Corp. This assessment was
completed in October 2007. The CMD Committee also reviewed and
evaluated tally sheets that summarized Macys obligations
for a select group of senior executives under various employment
termination scenarios.
Following review of the Mercer materials, the CMD Committee
determined that:
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the agreements provide key executives with the opportunity to
earn compensation they would reasonably expect to earn absent a
change-in-control
transaction;
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the agreements should preserve neutrality toward potential
change-in-control
transactions so that executives can focus on achieving an
outcome that is in the best interests of the companys
stockholders;
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the agreements should help to retain executives during and after
a
change-in-control
transaction;
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the agreements continue to help the company recruit and retain
retail talent because the provision of
change-in-control
severance benefits are still the custom in the industry; and
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the benefits under the companys
change-in-control
arrangements fall within the range of market practice in the
retail peer group and compared to the large companies in
Mercers database of 350 companies.
|
Consequently, the CMD Committee determined that Macys
should offer to extend the
change-in-control
agreements for terms of one year, to November 1, 2008, and
not change the other terms of the agreements except to add a
provision enabling the company to amend the agreements from time
to time as it deems
45
necessary to comply with Section 409A. The CMD Committee
asked Mercer and management to continue to explore alternatives
for providing
change-in-control
protection for the committee to consider during 2008.
The
change-in-control
agreements define change in control and good
reason as described under Compensation of the Named
Executives for 2007 Potential Payments upon
Termination or Change in Control below.
Stock
Ownership Guidelines For Executives
During fiscal 2006, the Board adopted stock ownership guidelines
for certain executives of Macys, including the Named
Executives. Under the guidelines, each corporate officer at the
level of Senior Vice President and above and each division
principal is required to own Macys stock, as follows:
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Position
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Ownership Guideline
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Chief Executive Officer
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5 x base salary
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Vice Chair and Executive Vice President
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3 x base salary
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Senior Vice President and Division Principal
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1 x base salary
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Shares counted toward the ownership requirement include:
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any shares beneficially owned by the executive;
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stock credits or other stock units credited to an
executives account through deferrals under the
companys deferred compensation program;
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restricted stock before the restrictions have lapsed;
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time-based stock credits issued under the stock credit plans
during performance and holding periods;
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performance-based stock credits issued under the stock credit
plans during holding periods; and
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the executives proportionate share of the Macys
common stock fund under the companys 401(k) plan.
|
Macys common stock subject to unvested or unexercised
stock options does not count toward the ownership requirement.
An executive must comply with these guidelines by the later of
August 1, 2011 or within five years from the date the
executive is employed in one of the positions listed above.
Ownership is measured as of August 1 of each year. As of
August 1, 2007, each of the Named Executives owned
sufficient shares within the above-listed categories to satisfy
the stock ownership guidelines.
COMPENSATION
COMMITTEE REPORT
The CMD Committee establishes and administers the compensation
practices related to the senior executive officers of
Macys and also ensures appropriate succession plans for
the CEO and other key executive positions. All members of the
CMD Committee qualify:
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as independent under the applicable listing
standards of the NYSE;
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as non-employee directors under
Rule 16b-3
of the Securities Exchange Act of 1934; and
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as outside directors under Section 162(m) of
the Internal Revenue Code of 1986.
|
The CMD Committee met four times in fiscal 2007. The CMD
Committee regularly meets in executive session without the
presence of management.
46
The CMD Committee has reviewed and discussed the Compensation
Discussion & Analysis with Macys management.
Based on the review and discussions referred to above, the CMD
Committee recommended to the Board that the Compensation
Discussion & Analysis be included in Macys
Annual Report on
Form 10-K
and proxy statement.
The foregoing report was submitted by the CMD Committee and
shall not be deemed to be soliciting material or to
be filed with the SEC or subject to
Regulation 14A promulgated by the SEC or Section 18 of
the Exchange Act.
Respectfully submitted,
Craig E. Weatherup, Chairperson
Meyer Feldberg
Sara Levinson
Joseph Neubauer
Joseph A. Pichler
Karl M. von der Heyden
47
COMPENSATION
OF THE NAMED EXECUTIVES FOR 2007
The following table summarizes the compensation of Macys
principal executive officer, principal financial officer and the
three other most highly compensated executive officers of
Macys, collectively referred to as the Named
Executives.
2007
SUMMARY COMPENSATION TABLE
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|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
|
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|
|
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Changes in
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|
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|
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|
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Pension Value
|
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|
|
|
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|
|
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|
|
|
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and
|
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|
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|
Non-Equity
|
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Nonqualified
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|
|
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|
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Incentive
|
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Deferred
|
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|
|
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
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Plan
|
|
Compensation
|
|
All Other
|
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Name and Principal
|
|
|
|
Salary
|
|
Bonus
|
|
Awards(1)
|
|
Awards (2)
|
|
Compensation
|
|
Earnings (3)
|
|
Compensation (4)
|
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Total
|
Position
|
|
Year
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
T. Lundgren
|
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|
2007
|
|
|
|
1,491,667
|
|
|
|
0
|
|
|
|
826,710
|
|
|
|
4,840,013
|
|
|
|
0
|
|
|
|
1,218,942
|
|
|
|
290,945
|
|
|
|
8,668,277
|
|
Chairman, President and Chief Executive Officer
|
|
|
2006
|
|
|
|
1,383,333
|
|
|
|
0
|
|
|
|
6,651,653
|
|
|
|
3,464,675
|
|
|
|
2,704,800
|
|
|
|
1,199,550
|
|
|
|
243,106
|
|
|
|
15,647,117
|
|
K. Hoguet
|
|
|
2007
|
|
|
|
791,667
|
|
|
|
0
|
|
|
|
521,825
|
|
|
|
1,113,982
|
|
|
|
0
|
|
|
|
372,011
|
|
|
|
77,280
|
|
|
|
2,876,765
|
|
Executive Vice President and CFO
|
|
|
2006
|
|
|
|
741,667
|
|
|
|
25,000
|
|
|
|
1,235,294
|
|
|
|
877,552
|
|
|
|
724,500
|
|
|
|
296,471
|
|
|
|
79,848
|
|
|
|
3,980,332
|
|
T. Cole
|
|
|
2007
|
|
|
|
962,500
|
|
|
|
0
|
|
|
|
376,722
|
|
|
|
1,283,933
|
|
|
|
0
|
|
|
|
808,340
|
|
|
|
67,579
|
|
|
|
3,499,074
|
|
Vice Chair
|
|
|
2006
|
|
|
|
883,333
|
|
|
|
25,000
|
|
|
|
1,691,762
|
|
|
|
1,023,142
|
|
|
|
869,400
|
|
|
|
444,407
|
|
|
|
58,045
|
|
|
|
4,995,089
|
|
J. Grove
|
|
|
2007
|
|
|
|
962,500
|
|
|
|
0
|
|
|
|
381,975
|
|
|
|
1,283,933
|
|
|
|
0
|
|
|
|
540,547
|
|
|
|
51,108
|
|
|
|
3,220,063
|
|
Vice Chair
|
|
|
2006
|
|
|
|
883,333
|
|
|
|
25,000
|
|
|
|
1,702,317
|
|
|
|
1,023,142
|
|
|
|
869,400
|
|
|
|
348,355
|
|
|
|
57,026
|
|
|
|
4,908,573
|
|
S. Kronick
|
|
|
2007
|
|
|
|
1,091,667
|
|
|
|
0
|
|
|
|
377,286
|
|
|
|
1,511,766
|
|
|
|
0
|
|
|
|
738,738
|
|
|
|
86,975
|
|
|
|
3,806,432
|
|
Vice Chair
|
|
|
2006
|
|
|
|
1,042,500
|
|
|
|
25,000
|
|
|
|
1,978,004
|
|
|
|
1,146,552
|
|
|
|
1,014,300
|
|
|
|
475,305
|
|
|
|
58,535
|
|
|
|
5,740,196
|
|
|
|
|
(1) |
|
The amounts in this column for fiscal 2007 reflect the dollar
amounts recognized for financial statement reporting purposes
for fiscal 2007, in accordance with FAS 123R, for
restricted stock awarded under the 1995 Equity Plan and for
stock credits awarded under Macys stock credit plans, and
thus include amounts with respect to awards granted in and prior
to fiscal 2007. In addition, with respect to stock credits, the
amounts also reflect variable accounting treatment. Assumptions
used in the calculation of these amounts are included in
footnotes 1 and 14 to Macys audited financial statements
included in the 2007
10-K and in
footnotes 1 and 15 to Macys audited financial statements
included in the 2006
10-K. In all
cases, the amounts assume that the Named Executive remains with
Macys until all time-based restrictions have lapsed and
that 100% of performance-based stock credits are earned. |
48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
Stock Credits
|
|
2007
|
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
2007 Total
|
|
Total
|
|
|
|
|
|
|
Grant
|
|
Restricted
|
|
|
|
|
|
|
|
2007
|
|
Stock
|
|
Stock
|
|
|
|
|
|
|
Date
|
|
Stock
|
|
|
|
|
|
2007
|
|
Dividend
|
|
Credit Expense/
|
|
Awards
|
|
|
Grant
|
|
Shares
|
|
FMV
|
|
Expense
|
|
Grant
|
|
Shares
|
|
Expense
|
|
Expense
|
|
(Credit)
|
|
Expense
|
|
|
Date
|
|
(#)
|
|
($)
|
|
($)
|
|
Date
|
|
(#)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
Lundgren
|
|
|
3/1/07
|
|
|
|
75,000
|
|
|
|
44.29
|
|
|
|
830,438
|
|
|
|
3/26/04
|
|
|
|
114,744
|
|
|
|
(1,536,702
|
)
|
|
|
27,161
|
|
|
|
(1,509,541
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/24/06
|
|
|
|
266,078
|
|
|
|
1,505,813
|
|
|
|
0
|
|
|
|
1,505,813
|
|
|
|
826,710
|
|
Hoguet
|
|
|
7/11/06
|
|
|
|
42,000
|
|
|
|
36.44
|
|
|
|
510,160
|
|
|
|
3/26/04
|
|
|
|
36,062
|
|
|
|
(182,618
|
)
|
|
|
8,536
|
|
|
|
(174,082
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/24/06
|
|
|
|
58,466
|
|
|
|
185,747
|
|
|
|
0
|
|
|
|
185,747
|
|
|
|
521,825
|
|
Cole
|
|
|
7/11/06
|
|
|
|
50,000
|
|
|
|
36.44
|
|
|
|
607,346
|
|
|
|
3/26/04
|
|
|
|
42,620
|
|
|
|
(571,589
|
)
|
|
|
10,089
|
|
|
|
(561,500
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/24/06
|
|
|
|
58,466
|
|
|
|
330,876
|
|
|
|
0
|
|
|
|
330,876
|
|
|
|
376,722
|
|
Grove
|
|
|
3/26/04
|
|
|
|
2,000
|
|
|
|
25.25
|
|
|
|
5,253
|
|
|
|
3/26/04
|
|
|
|
42,620
|
|
|
|
(571,589
|
)
|
|
|
10,089
|
|
|
|
(561,500
|
)
|
|
|
|
|
|
|
|
7/11/06
|
|
|
|
50,000
|
|
|
|
36.44
|
|
|
|
607,346
|
|
|
|
3/24/06
|
|
|
|
58,466
|
|
|
|
330,876
|
|
|
|
0
|
|
|
|
330,876
|
|
|
|
381,975
|
|
Kronick
|
|
|
7/11/06
|
|
|
|
50,000
|
|
|
|
36.44
|
|
|
|
607,346
|
|
|
|
3/26/04
|
|
|
|
42,620
|
|
|
|
(571,025
|
)
|
|
|
10,089
|
|
|
|
(560,936
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/24/06
|
|
|
|
58,466
|
|
|
|
330,876
|
|
|
|
0
|
|
|
|
330,876
|
|
|
|
377,286
|
|
|
|
|
(2) |
|
The amounts in this column for fiscal 2007 reflect the dollar
amount recognized for financial statement reporting purposes in
accordance with FAS 123R for fiscal 2007 for stock options
issued pursuant to the 1995 Equity Plan, and thus may include
amounts from awards granted in and prior to 2007. Assumptions
used in the calculation of these amounts are included in
footnote 14 to Macys audited financial statements included
in the 2007
10-K, in
footnote 15 to Macys audited financial statements included
in the 2006
10-K and in
footnote 12 to Macys audited financial statements included
in the 2005
10-K. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lundgren
|
|
Hoguet
|
|
Cole
|
|
|
|
|
|
|
2007
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
|
|
|
2007
|
Grant
|
|
Options
|
|
FMV
|
|
Expense
|
|
Grant
|
|
Options
|
|
FMV
|
|
Expense
|
|
Grant
|
|
Options
|
|
FMV
|
|
Expense
|
Date
|
|
(#)
|
|
($)
|
|
($)
|
|
Date
|
|
(#)
|
|
($)
|
|
($)
|
|
Date
|
|
(#)
|
|
($)
|
|
($)
|
|
10/26/07
|
|
|
134,000
|
|
|
|
8.33
|
|
|
|
167,433
|
|
|
|
3/23/07
|
|
|
|
29,444
|
|
|
|
16.94
|
|
|
|
103,913
|
|
|
|
3/23/07
|
|
|
|
29,444
|
|
|
|
16.94
|
|
|
|
103,913
|
|
3/01/07
|
|
|
500,000
|
|
|
|
16.40
|
|
|
|
1,879,167
|
|
|
|
7/11/06
|
|
|
|
125,000
|
|
|
|
13.67
|
|
|
|
569,583
|
|
|
|
7/11/06
|
|
|
|
150,000
|
|
|
|
13.67
|
|
|
|
683,500
|
|
3/24/06
|
|
|
177,352
|
|
|
|
13.58
|
|
|
|
602,110
|
|
|
|
3/24/06
|
|
|
|
38,970
|
|
|
|
13.58
|
|
|
|
132,303
|
|
|
|
3/24/06
|
|
|
|
38,970
|
|
|
|
13.58
|
|
|
|
132,303
|
|
3/25/05
|
|
|
550,000
|
|
|
|
10.50
|
|
|
|
1,443,750
|
|
|
|
3/25/05
|
|
|
|
55,000
|
|
|
|
10.50
|
|
|
|
144,375
|
|
|
|
3/25/05
|
|
|
|
65,000
|
|
|
|
10.50
|
|
|
|
170,625
|
|
3/26/04
|
|
|
275,000
|
|
|
|
10.10
|
|
|
|
694,375
|
|
|
|
3/26/04
|
|
|
|
55,000
|
|
|
|
10.10
|
|
|
|
138,875
|
|
|
|
3/26/04
|
|
|
|
65,000
|
|
|
|
10.10
|
|
|
|
164,125
|
|
2/24/03
|
|
|
500,000
|
|
|
|
4.87
|
|
|
|
53,178
|
|
|
|
3/28/03
|
|
|
|
110,000
|
|
|
|
5.44
|
|
|
|
24,933
|
|
|
|
3/28/03
|
|
|
|
130,000
|
|
|
|
5.44
|
|
|
|
29,467
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,840,013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,113,982
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,283,933
|
|
Grove
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kronick
|
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
Grant
|
|
Options
|
|
|
FMV
|
|
|
Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant
|
|
|
Options
|
|
|
FMV
|
|
|
Expense
|
|
Date
|
|
(#)
|
|
|
($)
|
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date
|
|
|
(#)
|
|
|
($)
|
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/23/07
|
|
|
29,444
|
|
|
|
16.94
|
|
|
|
103,913
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/23/07
|
|
|
|
29,444
|
|
|
|
16.94
|
|
|
|
103,913
|
|
7/11/06
|
|
|
150,000
|
|
|
|
13.67
|
|
|
|
683,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7/11/06
|
|
|
|
200,000
|
|
|
|
13.67
|
|
|
|
911,333
|
|
3/24/06
|
|
|
38,970
|
|
|
|
13.58
|
|
|
|
132,303
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/24/06
|
|
|
|
38,970
|
|
|
|
13.58
|
|
|
|
132,303
|
|
3/25/05
|
|
|
65,000
|
|
|
|
10.50
|
|
|
|
170,625
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/25/05
|
|
|
|
65,000
|
|
|
|
10.50
|
|
|
|
170,625
|
|
3/26/04
|
|
|
65,000
|
|
|
|
10.10
|
|
|
|
164,125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/26/04
|
|
|
|
65,000
|
|
|
|
10.10
|
|
|
|
164,125
|
|
3/28/03
|
|
|
130,000
|
|
|
|
5.44
|
|
|
|
29,467
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/28/03
|
|
|
|
130,000
|
|
|
|
5.44
|
|
|
|
29,467
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,283,933
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,511,766
|
|
49
|
|
|
(3) |
|
The amounts reflected for fiscal 2007 represent the change in
fiscal 2007 in the actuarial present value of accumulated
pension benefits under the companys cash balance pension
plan and supplementary executive retirement plan. Macys
does not pay above-market interest under its deferred
compensation plan. The assumptions used in determining the
present value of benefits are the same assumptions used for
financial reporting purposes. The present value of benefits was
determined using a unit credit cost method and 5.95% discount
rate. The assumed retirement age used for these calculations was
the normal retirement age of 65, as defined by the plans and
each Named Executive was assumed to live to and retire at the
normal retirement age. |
|
(4) |
|
Included in All Other Compensation for fiscal 2007
is the incremental cost to Macys of the following
perquisites made available to the Named Executives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
|
|
|
|
401(k) Matching
|
|
|
|
|
|
|
Aircraft
|
|
|
Financial
|
|
|
Car
|
|
|
Merchandise
|
|
|
|
|
|
Contribution/
|
|
|
|
|
|
|
Usage(a)
|
|
|
Counseling
|
|
|
Programs (b)
|
|
|
Discount
|
|
|
Gross up (c)
|
|
|
Insurance Premiums
|
|
|
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Total
|
|
|
Lundgren
|
|
|
95,699
|
|
|
|
15,575
|
|
|
|
86,956
|
|
|
|
52,019
|
|
|
|
34,102
|
|
|
|
6,593
|
|
|
|
290,945
|
|
Hoguet
|
|
|
0
|
|
|
|
15,575
|
|
|
|
10,811
|
|
|
|
27,784
|
|
|
|
16,518
|
|
|
|
6,593
|
|
|
|
77,280
|
|
Cole
|
|
|
0
|
|
|
|
15,575
|
|
|
|
15,475
|
|
|
|
20,995
|
|
|
|
8,942
|
|
|
|
6,593
|
|
|
|
67,579
|
|
Grove
|
|
|
0
|
|
|
|
15,575
|
|
|
|
11,620
|
|
|
|
13,598
|
|
|
|
3,722
|
|
|
|
6,593
|
|
|
|
51,108
|
|
Kronick
|
|
|
0
|
|
|
|
15,575
|
|
|
|
12,410
|
|
|
|
38,085
|
|
|
|
16,038
|
|
|
|
4,868
|
|
|
|
86,975
|
|
|
|
|
(a) |
|
The amount shown for aircraft usage represents a ratio of flight
hours for personal flights divided by total flight hours on all
company planes. The ratio was applied against total airplane
cost (excluding depreciation, real estate taxes, insurance, rent
and other fixed operating costs). |
|
|
|
|
|
Total flight hours equals the total number of hours for every
flight flown.
|
|
|
|
Flights were deemed business or personal based on the primary
purpose for the flight.
|
|
|
|
If a trip was deemed personal, ferry flight hours, if any, were
included as personal.
|
|
|
|
If a trip included an intermediary personal stop, only the
difference between a direct flight and the indirect flight was
considered personal.
|
|
|
|
If a trip was exclusively personal except for a
one-day
business stop, all miles were treated as personal less an
adjustment for the flight hours to and from the originating
airport to the business location.
|
For a more detailed description of Macys policies with
respect to personal use of company airplanes, see the
Benefits discussion in the Compensation
Discussion & Analysis.
|
|
|
(b) |
|
The amount shown reflects the product of (i) the percentage
of miles the Named Executive used the vehicle for non-business
reasons multiplied by (ii) the actual costs incurred to
provide the vehicle, including the costs of the lease, fuel,
parking and insurance, reduced by any personal contributions
made by the Named Executive. For Mr. Lundgren, the amount
also includes the costs relating to personal use of a dedicated
car and driver service that the company makes available to him
for security reasons pursuant to the recommendation of a
third-party security study. The aggregate incremental cost for
personal use of the car and driver service is calculated by
allocating the costs of operating the car and compensating the
driver between personal and business use. The cost of operating
the car is allocated to personal use on the basis of miles
driven for personal use to total miles driven. The cost |
50
|
|
|
|
|
of compensating the driver is allocated to personal use on the
basis of driver hours related to personal use to the total
number of driver hours. |
|
(c) |
|
The amount shown reflects gross up payments made in December
2007 on the executive discount for the period from November 2006
through October 2007. |
Plan-Based
Awards
The following table sets forth certain information regarding the
annual incentive plan and stock options and other equity awards
granted during fiscal 2007 to each of the Named Executives.
2007
GRANTS OF PLAN-BASED AWARDS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
|
|
|
|
|
|
Grant
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
Awards:
|
|
|
Exercise
|
|
|
Closing
|
|
|
Date Fair
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
Number of
|
|
|
or Base
|
|
|
Market
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts Under
|
|
|
of Shares
|
|
|
Securities
|
|
|
Price of
|
|
|
Price on
|
|
|
Stock and
|
|
|
|
|
|
|
|
|
|
Non-Equity Incentive Plan Awards(1)
|
|
|
of Stock
|
|
|
Underlying
|
|
|
Option
|
|
|
Date of
|
|
|
Option
|
|
|
|
Plan
|
|
|
Grant
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
or Units(#)
|
|
|
Options
|
|
|
Awards
|
|
|
Grant
|
|
|
Awards
|
|
Name
|
|
Name
|
|
|
Date
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
(2)
|
|
|
(#)(3)
|
|
|
($/sh)
|
|
|
($)
|
|
|
($)(4)
|
|
|
Lundgren
|
|
|
1995 Equity Plan
|
|
|
|
3/1/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,321,750
|
|
|
|
|
1995 Equity Plan
|
|
|
|
3/1/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
500,000
|
|
|
|
44.67
|
|
|
|
44.29
|
|
|
|
8,200,000
|
|
|
|
|
1992 Bonus Plan
|
|
|
|
3/23/07
|
|
|
|
600,000
|
|
|
|
2,250,000
|
|
|
|
4,500,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1995 Equity Plan
|
|
|
|
10/26/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
134,000
|
|
|
|
46.15
|
|
|
|
33.00
|
|
|
|
1,116,220
|
|
Hoguet
|
|
|
1992 Bonus Plan
|
|
|
|
3/23/07
|
|
|
|
160,000
|
|
|
|
600,000
|
|
|
|
1,200,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1995 Equity Plan
|
|
|
|
3/23/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,444
|
|
|
|
46.15
|
|
|
|
46.51
|
|
|
|
498,781
|
|
Cole
|
|
|
1992 Bonus Plan
|
|
|
|
3/23/07
|
|
|
|
195,000
|
|
|
|
731,250
|
|
|
|
1,462,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1995 Equity Plan
|
|
|
|
3/23/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,444
|
|
|
|
46.15
|
|
|
|
46.51
|
|
|
|
498,781
|
|
Grove
|
|
|
1992 Bonus Plan
|
|
|
|
3/23/07
|
|
|
|
195,000
|
|
|
|
731,250
|
|
|
|
1,462,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1995 Equity Plan
|
|
|
|
3/23/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,444
|
|
|
|
46.15
|
|
|
|
46.51
|
|
|
|
498,781
|
|
Kronick
|
|
|
1992 Bonus Plan
|
|
|
|
3/23/07
|
|
|
|
220,000
|
|
|
|
825,000
|
|
|
|
1,650,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1995 Equity Plan
|
|
|
|
3/23/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,444
|
|
|
|
46.15
|
|
|
|
46.51
|
|
|
|
498,781
|
|
|
|
|
(1) |
|
The Named Executives are eligible for an annual cash incentive
award under Macys 1992 Bonus Plan, which is deemed a
non-equity incentive plan under SEC rules. Bonus
awards are interpolated for performance that falls between
Threshold and Target and between
Target and Maximum. The actual bonus
amount earned, if any, under the 1992 Bonus Plan is reported in
the Non-Equity Incentive Plan Compensation column of
the 2007 Summary Compensation Table. For a more detailed
discussion of the 1992 Bonus Plan, see the Annual
Performance-Based Bonus discussion in the
Compensation Discussion & Analysis. |
|
(2) |
|
The numbers in this column represent time-based restricted stock
granted to the Named Executives under Macys 1995 Equity
Plan. |
|
(3) |
|
The numbers reflected in this column represent the number of
stock options granted to the Named Executives under Macys
1995 Equity Plan. |
|
(4) |
|
Stock options were valued as of the grant date using the
Black-Scholes option pricing model in accordance with
FAS 123R, using the following assumptions: |
51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/1/07
Grant
|
|
|
3/23/07
Grant
|
|
|
10/26/07
Grant
|
|
|
Dividend yield:
|
|
|
1.2
|
%
|
|
|
1.2
|
%
|
|
|
1.2
|
%
|
Expected volatility:
|
|
|
36.9
|
%
|
|
|
36.9
|
%
|
|
|
36.9
|
%
|
Risk-free interest rate:
|
|
|
4.6
|
%
|
|
|
4.6
|
%
|
|
|
4.6
|
%
|
Expected life:
|
|
|
5.3 years
|
|
|
|
5.3 years
|
|
|
|
5.3 years
|
|
Black-Scholes value:
|
|
$
|
16.40
|
|
|
$
|
16.94
|
|
|
$
|
8.33
|
|
Restricted stock was valued for purposes of this table based on
the closing price of Macys common stock on the grant date.
Stock Options. The CMD Committee may
grant stock options from the 1995 Equity Plan and the 1994 Stock
Plan, each of which has been approved by Macys
stockholders. The exercise price of stock options may not be
less than the market price of the underlying Macys common
stock on the grant date (which, among other ways, is defined in
the plans as the closing price of Macys common stock on
the NYSE on the trading day prior to the grant date). The
options vest over time, typically in 25% installments on the
first through fourth anniversaries of the grant date, and have
ten year terms. All stock options granted to the Named
Executives in fiscal 2007 were granted from the 1995 Equity
Plan. The options granted on March 1, 2007 vest fully on
February 28, 2011. The options granted on March 23,
2007 vest 25% per year over four years beginning with the first
anniversary of the date of grant. The options granted on
October 26, 2007 vest 25% per year over four years,
beginning on March 23, 2008. See also the Stock
Options discussion in the Compensation
Discussion & Analysis.
Restricted Stock. The CMD Committee
grants shares of restricted stock from time to time for
retention and performance reasons. Restricted stock grants may
be granted from either the 1995 Equity Plan or the 1994 Stock
Plan and can be either time-based or performance-based.
Time-based restricted stock will generally be forfeited by the
executive if the executives employment with Macys
ends prior to the vesting date. Shares may vest 100% on the
third anniversary of the grant date or in installments over a
number of years following the first anniversary of the grant
date. Time-based restricted stock may not fully vest in under
three years. Performance-based restricted stock is subject to
forfeiture if performance criteria applicable to the shares are
not satisfied
and/or if
the executives employment with Macys ends prior to
the vesting date. Performance-based restricted stock may not
fully vest in less than one year. Depending upon satisfaction of
the performance criteria, shares may vest up to 100% on the
first anniversary of the grant date or in installments over a
number of years following the first anniversary of the grant
date. To the extent performance criteria are not satisfied,
shares are forfeited. The shares of restricted stock granted to
Mr. Lundgren in fiscal 2007 are time-based restricted
shares and were granted from the 1995 Equity Plan. The shares
fully vest on February 28, 2011 if Mr. Lundgren
remains employed by Macys through that date. If his
employment ends prior to February 28, 2011, then the
unvested shares of restricted stock are forfeited.
Mr. Lundgren receives dividends on these shares at the same
rate and on the same payment date as other Macys
stockholders receive dividends on the Macys common stock
they own. For a more detailed description of
Mr. Lundgrens restricted stock grant, see the
Special 2007 Retention Grants discussion in the
Compensation Discussion & Analysis.
Stock Credits. The CMD Committee
authorized a stock credit plan in fiscal 2004 for the
2004-2005
performance period and in fiscal 2006 for the
2006-2007
performance period. The CMD Committee granted stock credits to
the Named Executives in each of fiscal 2004 and fiscal 2006. It
did not grant any stock credits in fiscal 2005 or fiscal 2007.
Stock credits issued under either plan may be time-based or
performance-based, with performance objectives tied to the
companys Four Priorities and, with respect to the plan
authorized in
52
2006, to certain merger-related synergies. See the Stock
Credits discussion in the Compensation
Discussion & Analysis.
At the end of a two-year performance period, the CMD Committee
evaluates performance against the performance criteria
applicable to the stock credits to determine the percent (from
0% to 100%) of the performance-based stock credits earned by the
Named Executives. The performance-based stock credits earned by
the Named Executives and the time-based stock credits held by
them are then subject to two- and three-year holding periods.
The value of one-half of the stock credits, including dividend
equivalents paid during the holding period, is paid in cash at
the end of the two-year holding period and the value of the
other half, including such dividend equivalents, is paid in cash
at the end of the three-year holding period. In each case, the
value is determined on the basis of the average closing price of
Macys common stock as reported on the NYSE for the 20
business days preceding the payment date.
Participants who leave the company during the performance period
will forfeit their stock credits unless they retire at or after
age 62 with at least 10 years of vesting service or if
they are terminated by Macys other than for cause, in
which case their payments will be prorated for the number of
months of completed service during the performance period
divided by 24. Their payments will be made at the same time and
in the same manner as payments to actively employed
participants. In the event that a participant dies or becomes
totally and permanently disabled during the performance period,
the participant (in the event of disability) or the
participants estate (in the event of death) will receive a
lump sum payment of 50% of the participants stock credit
balance, discounted to present value.
Participants who leave the company during a holding period will:
|
|
|
|
|
forfeit their stock credit balances if they leave the company
voluntarily or if their employment is terminated for cause;
|
|
|
|
receive the stock credits they have earned if they retire at or
after age 62 with at least 10 years of vesting service
or if they are terminated by Macys for other than cause,
payable at the same time and in the same manner as payments to
actively employed participants;
|
|
|
|
receive a pro-rata payment of their stock credit balance if they
retire between the ages of 55 and 62 with at least 10 years
of vesting service, payable at the same time and in the same
manner as payments to actively employed participants; and
|
|
|
|
receive a lump sum payment of the discounted present value of
the total account in case of death or total and permanent
disability.
|
All stock credit balances in the
2006-2007
stock credit plan vest and become immediately payable upon a
change in control of the company.
53
Outstanding
Equity Interests
The following table sets forth certain information regarding the
total number and aggregate value of options, stock credits and
restricted stock held by each of the Named Executives at
February 2, 2008. The dollar amount shown for stock credits
and restricted stock is calculated by multiplying the number of
stock credits or shares of restricted stock, as applicable, by
the closing price of Macys common stock ($28.00) on the
last trading day of fiscal 2007.
2007
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive Plan
|
|
|
Market or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
Awards:
|
|
|
Payout
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
|
Value of
|
|
|
Number of
|
|
|
Value of
|
|
|
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Shares or
|
|
|
Unearned
|
|
|
Unearned
|
|
|
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
Units of
|
|
|
Shares, Units
|
|
|
Shares,
|
|
|
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
|
|
|
|
|
|
Units of
|
|
|
Stock
|
|
|
or Other
|
|
|
Units or
|
|
|
|
|
|
|
Options
|
|
|
Options
|
|
|
Option
|
|
|
|
|
|
Stock That
|
|
|
That Have
|
|
|
Rights That
|
|
|
Other Rights
|
|
|
|
|
|
|
(#)
|
|
|
(#)
|
|
|
Exercise
|
|
|
Option
|
|
|
Have Not
|
|
|
Not
|
|
|
Have Not
|
|
|
That Have
|
|
|
|
Grant
|
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Price
|
|
|
Expiration
|
|
|
Vested
|
|
|
Vested
|
|
|
Vested
|
|
|
Not Vested
|
|
Name
|
|
Date
|
|
|
(1)
|
|
|
(1)
|
|
|
($)
|
|
|
Date
|
|
|
(#)
|
|
|
($)
|
|
|
(#)(2)
|
|
|
($)
|
|
|
Lundgren
|
|
|
2/25/00
|
|
|
|
600,000
|
|
|
|
0
|
|
|
|
16.2187
|
|
|
|
2/25/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/08/01
|
|
|
|
306,976
|
|
|
|
0
|
|
|
|
21.5000
|
|
|
|
6/08/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/22/02
|
|
|
|
500,000
|
|
|
|
0
|
|
|
|
21.3400
|
|
|
|
3/22/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/24/03
|
|
|
|
500,000
|
|
|
|
0
|
|
|
|
12.7900
|
|
|
|
2/24/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/26/04
|
|
|
|
206,250
|
|
|
|
68,750
|
|
|
|
25.0050
|
|
|
|
3/26/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/25/05
|
|
|
|
275,000
|
|
|
|
275,000
|
|
|
|
30.5350
|
|
|
|
3/25/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/24/06
|
|
|
|
44,338
|
|
|
|
133,014
|
|
|
|
36.2600
|
|
|
|
3/24/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/01/07
|
|
|
|
0
|
|
|
|
500,000
|
|
|
|
44.6700
|
|
|
|
3/01/17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/26/07
|
|
|
|
0
|
|
|
|
134,000
|
|
|
|
46.1500
|
|
|
|
3/23/17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,000
|
(3)
|
|
|
2,100,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
214,522
|
(4)
|
|
|
6,006,616
|
|
|
|
166,300
|
|
|
|
4,656,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hoguet
|
|
|
2/25/00
|
|
|
|
46,000
|
|
|
|
0
|
|
|
|
16.2187
|
|
|
|
2/25/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/23/01
|
|
|
|
46,000
|
|
|
|
0
|
|
|
|
21.4250
|
|
|
|
3/23/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/08/01
|
|
|
|
153,488
|
|
|
|
0
|
|
|
|
21.5000
|
|
|
|
6/08/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/22/02
|
|
|
|
60,000
|
|
|
|
0
|
|
|
|
21.3400
|
|
|
|
3/22/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/28/03
|
|
|
|
110,000
|
|
|
|
0
|
|
|
|
14.2850
|
|
|
|
3/28/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/26/04
|
|
|
|
41,250
|
|
|
|
13,750
|
|
|
|
25.0050
|
|
|
|
3/26/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/25/05
|
|
|
|
27,500
|
|
|
|
27,500
|
|
|
|
30.5350
|
|
|
|
3/25/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/24/06
|
|
|
|
9,744
|
|
|
|
29,226
|
|
|
|
36.2600
|
|
|
|
3/24/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7/11/06
|
|
|
|
0
|
|
|
|
125,000
|
|
|
|
36.5100
|
|
|
|
7/11/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/23/07
|
|
|
|
0
|
|
|
|
29,444
|
|
|
|
46.1500
|
|
|
|
3/23/17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,000
|
(3)
|
|
|
1,176,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
57,986
|
(4)
|
|
|
1,623,608
|
|
|
|
36,542
|
|
|
|
1,023,176
|
|
54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive Plan
|
|
|
Market or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
Awards:
|
|
|
Payout
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
|
Value of
|
|
|
Number of
|
|
|
Value of
|
|
|
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Shares or
|
|
|
Unearned
|
|
|
Unearned
|
|
|
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
Units of
|
|
|
Shares, Units
|
|
|
Shares,
|
|
|
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
|
|
|
|
|
|
Units of
|
|
|
Stock
|
|
|
or Other
|
|
|
Units or
|
|
|
|
|
|
|
Options
|
|
|
Options
|
|
|
Option
|
|
|
|
|
|
Stock That
|
|
|
That Have
|
|
|
Rights That
|
|
|
Other Rights
|
|
|
|
|
|
|
(#)
|
|
|
(#)
|
|
|
Exercise
|
|
|
Option
|
|
|
Have Not
|
|
|
Not
|
|
|
Have Not
|
|
|
That Have
|
|
|
|
Grant
|
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Price
|
|
|
Expiration
|
|
|
Vested
|
|
|
Vested
|
|
|
Vested
|
|
|
Not Vested
|
|
Name
|
|
Date
|
|
|
(1)
|
|
|
(1)
|
|
|
($)
|
|
|
Date
|
|
|
(#)
|
|
|
($)
|
|
|
(#)(2)
|
|
|
($)
|
|
|
Cole
|
|
|
3/23/01
|
|
|
|
36,000
|
|
|
|
0
|
|
|
|
21.4250
|
|
|
|
3/23/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/08/01
|
|
|
|
164,930
|
|
|
|
0
|
|
|
|
21.5000
|
|
|
|
6/08/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/22/02
|
|
|
|
72,000
|
|
|
|
0
|
|
|
|
21.3400
|
|
|
|
3/22/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/26/04
|
|
|
|
48,750
|
|
|
|
16,250
|
|
|
|
25.0050
|
|
|
|
3/26/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/25/05
|
|
|
|
32,500
|
|
|
|
32,500
|
|
|
|
30.5350
|
|
|
|
3/25/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/24/06
|
|
|
|
9,744
|
|
|
|
29,226
|
|
|
|
36.2600
|
|
|
|
3/24/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7/11/06
|
|
|
|
0
|
|
|
|
150,000
|
|
|
|
36.5100
|
|
|
|
7/11/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/23/07
|
|
|
|
0
|
|
|
|
29,444
|
|
|
|
46.1500
|
|
|
|
3/23/17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
(3)
|
|
|
1,400,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
64,544
|
(4)
|
|
|
1,807,232
|
|
|
|
36,542
|
|
|
|
1,023,176
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grove
|
|
|
2/25/00
|
|
|
|
72,000
|
|
|
|
0
|
|
|
|
16.2187
|
|
|
|
2/25/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/23/01
|
|
|
|
36,000
|
|
|
|
0
|
|
|
|
21.4250
|
|
|
|
3/23/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/08/01
|
|
|
|
159,348
|
|
|
|
0
|
|
|
|
21.5000
|
|
|
|
6/08/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/22/02
|
|
|
|
72,00
|
|
|
|
0
|
|
|
|
21.3400
|
|
|
|
3/22/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/26/04
|
|
|
|
48,750
|
|
|
|
16,250
|
|
|
|
25.0050
|
|
|
|
3/26/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/25/05
|
|
|
|
32,500
|
|
|
|
32,500
|
|
|
|
30.5350
|
|
|
|
3/25/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/24/06
|
|
|
|
9,744
|
|
|
|
29,226
|
|
|
|
36.2600
|
|
|
|
3/24/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7/11/06
|
|
|
|
0
|
|
|
|
150,000
|
|
|
|
36.5100
|
|
|
|
7/11/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/23/07
|
|
|
|
0
|
|
|
|
29,444
|
|
|
|
46.1500
|
|
|
|
3/23/17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,500
|
(3)
|
|
|
1,414,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
64,544
|
(4)
|
|
|
1,807,232
|
|
|
|
36,542
|
|
|
|
1,023,176
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kronick
|
|
|
3/23/01
|
|
|
|
72,000
|
|
|
|
0
|
|
|
|
21.4250
|
|
|
|
3/23/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/08/01
|
|
|
|
207,232
|
|
|
|
0
|
|
|
|
21.5000
|
|
|
|
6/08/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/22/02
|
|
|
|
72,000
|
|
|
|
0
|
|
|
|
21.3400
|
|
|
|
3/22/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/28/03
|
|
|
|
97,500
|
|
|
|
0
|
|
|
|
14.2850
|
|
|
|
3/28/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/26/04
|
|
|
|
48,750
|
|
|
|
16,250
|
|
|
|
25.0050
|
|
|
|
3/26/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/25/05
|
|
|
|
32,500
|
|
|
|
32,500
|
|
|
|
30.5350
|
|
|
|
3/25/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/24/06
|
|
|
|
9,744
|
|
|
|
29,226
|
|
|
|
36.2600
|
|
|
|
3/24/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7/11/06
|
|
|
|
0
|
|
|
|
200,000
|
|
|
|
36.5100
|
|
|
|
7/11/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/23/07
|
|
|
|
0
|
|
|
|
29,444
|
|
|
|
46.1500
|
|
|
|
3/23/17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
(3)
|
|
|
1,400,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
64,544
|
(4)
|
|
|
1,807,232
|
|
|
|
36,542
|
|
|
|
1,023,176
|
|
55
|
|
|
(1) |
|
Options vest/vested as follows, with full vesting upon a change
in control of the company: |
|
|
|
Grant Date
|
|
Vesting Schedule
|
|
2/25/00
|
|
25% on each of 3/24/01, 3/24/02, 3/24/03 and 3/24/04.
|
3/23/01
|
|
25% on each of 3/23/02, 3/23/03, 3/23/04 and 3/23/05.
|
6/08/01
|
|
100% on 6/01/05.
|
3/22/02
|
|
25% on each of 3/22/03, 3/22/04, 3/22/05 and 3/22/06.
|
2/24/03
|
|
25% on each of 2/24/04, 2/24/05, 2/24/06 and 2/24/07.
|
3/28/03
|
|
25% on each of 3/28/04, 3/28/05, 3/28/06 and 3/28/07.
|
3/26/04
|
|
25% on each of 3/26/05, 3/26/06, 3/26/07 and 3/26/08.
|
3/25/05
|
|
25% on each of 3/25/06, 3/25/07, 3/25/08 and 3/25/09.
|
3/24/06
|
|
25% on each of 3/24/07, 3/24/08, 3/24/09 and 3/24/10.
|
7/11/06
|
|
100% on 7/11/09.
|
3/01/07
|
|
100% on 2/28/11.
|
3/23/07
|
|
25% on each of 3/23/08, 3/23/09, 3/23/10 and 3/23/11.
|
10/26/07
|
|
25% on each of 3/23/08, 3/23/09, 3/23/10 and 3/23/11.
|
|
|
|
(2) |
|
Performance-based stock credits vest following the conclusion of
fiscal 2007, subject to the satisfaction of performance
criteria. Shares that vest are then subject to the holding
periods described in the Stock Credits discussion in
the Compensation Discussion & Analysis. |
|
(3) |
|
Time-based restricted stock. For Mr. Lundgren, the shares
vest on 2/28/11. For Mrs. Hoguet, Mr. Cole and
Ms. Kronick, the shares vest on 7/11/09. For
Ms. Grove, 500 of the shares vested on 3/26/08 and the
remaining 50,000 shares vest on 7/11/09. |
|
(4) |
|
Time-based and vested performance-based stock credits are
subject to satisfaction of holding periods that expired or will
expire as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Holding Period Expiration Date
|
|
|
|
2/4/08
|
|
|
2/2/09
|
|
|
2/1/10
|
|
|
1/31/11
|
|
|
Lundgren
|
|
|
57,372
|
|
|
|
57,372
|
|
|
|
49,889
|
|
|
|
49,889
|
|
Hoguet
|
|
|
18,031
|
|
|
|
18,031
|
|
|
|
10,962
|
|
|
|
10,962
|
|
Cole
|
|
|
21,310
|
|
|
|
21,310
|
|
|
|
10,962
|
|
|
|
10,962
|
|
Grove
|
|
|
21,310
|
|
|
|
21,310
|
|
|
|
10,962
|
|
|
|
10,962
|
|
Kronick
|
|
|
21,310
|
|
|
|
21,310
|
|
|
|
10,962
|
|
|
|
10,962
|
|
56
The following table sets forth certain information regarding the
value realized by each of the Named Executives during fiscal
2007 upon the exercise of stock options, the vesting of
restricted stock and the vesting of stock credits granted under
the
2004-2005
stock credit plan.
2007
OPTION EXERCISES AND STOCK VESTED
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
Value Realized
|
|
|
Number of Shares
|
|
|
Value Realized on
|
|
|
|
Number of Shares
|
|
|
Upon Exercise(1)
|
|
|
Acquired on Vesting(2)
|
|
|
Vesting
|
|
Name
|
|
Acquired on Exercise (#)
|
|
|
($)
|
|
|
(#)
|
|
|
($)
|
|
|
Lundgren
|
|
|
225,000
|
|
|
|
4,612,208
|
|
|
|
157,372
|
|
|
|
5,825,502
|
|
Hoguet
|
|
|
84,000
|
|
|
|
1,574,782
|
|
|
|
18,031
|
|
|
|
432,924
|
|
Cole
|
|
|
176,500
|
|
|
|
5,360,851
|
|
|
|
21,310
|
|
|
|
511,653
|
|
Grove
|
|
|
202,000
|
|
|
|
5,575,513
|
|
|
|
21,810
|
|
|
|
534,793
|
|
Kronick
|
|
|
114,500
|
|
|
|
3,160,429
|
|
|
|
21,310
|
|
|
|
511,653
|
|
|
|
|
(1) |
|
The amounts realized from option exercises reflect
the appreciation on the date of exercise (based on the excess of
the fair market value of the shares on the date of exercise over
the exercise price). However, because the Named Executives may
keep the shares they acquire upon the exercise of the option (or
sell them at different prices), these amounts do not necessarily
reflect cash actually realized upon the exercise of those
options. |
|
(2) |
|
For Mr. Lundgren, the number of shares acquired on
vesting represents 100,000 shares of restricted stock
that vested on February 28, 2007 and 57,372 stock credits
that vested at the end of fiscal 2007. For Ms. Grove, the
number represents 500 shares of restricted stock that
vested on March 26, 2007 and 21,310 stock credits that
vested at the end of fiscal 2007. For the other Named
Executives, the number represents stock credits that vested at
the end of fiscal 2007. |
Post
Retirement Compensation
Retirement
Plans
Macys retirement program, referred to as the Retirement
Program, consists of defined benefit plans and a defined
contribution plan. As of January 1, 2008, approximately
121,000 employees, including the Named Executives,
participated in the Retirement Program.
Defined Benefit Plans. Macys has
two defined benefit plans covering the Named
Executives a cash account pension plan, referred to
as the CAPP, and a supplementary executive retirement plan,
referred to as the SERP. The following table shows the actuarial
present value of each of the Named Executives accumulated
benefit under each plan, calculated as of the end of fiscal
2007. Macys determined the present
57
value using the same assumptions used for financial reporting
purposes a unit credit cost method, a 6.25% discount
interest rate, and a normal retirement age of 65 (as defined by
the plans).
2007
PENSION BENEFITS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Years of
|
|
Present Value of
|
|
|
|
|
Credited Service
|
|
Accumulated Benefit
|
Name
|
|
Plan Name
|
|
(#)
|
|
($)
|
|
Lundgren
|
|
|
CAPP
|
|
|
|
26
|
|
|
|
133,969
|
|
|
|
|
SERP
|
|
|
|
26
|
|
|
|
7,356,600
|
|
Hoguet
|
|
|
CAPP
|
|
|
|
25
|
|
|
|
165,444
|
|
|
|
|
SERP
|
|
|
|
25
|
|
|
|
2,001,870
|
|
Cole
|
|
|
CAPP
|
|
|
|
35
|
|
|
|
396,867
|
|
|
|
|
SERP
|
|
|
|
35
|
|
|
|
5,177,993
|
|
Grove
|
|
|
CAPP
|
|
|
|
34
|
|
|
|
333,540
|
|
|
|
|
SERP
|
|
|
|
34
|
|
|
|
4,646,950
|
|
Kronick
|
|
|
CAPP
|
|
|
|
34
|
|
|
|
285,342
|
|
|
|
|
SERP
|
|
|
|
34
|
|
|
|
5,148,458
|
|
Cash Account Pension Plan. Under the CAPP, a
participant retiring at a normal retirement age is eligible to
receive the amount credited to his or her pension account or the
monthly benefit payments determined actuarially based on the
amount credited to his or her pension account. Amounts credited
to a participants account consist of:
|
|
|
|
|
an opening cash balance for participants in the plan at
December 31, 1996, equal to the single sum present value,
using stated actuarial assumptions, of the participants
accrued normal retirement benefit earned at December 31,
1996, under the applicable predecessor pension plan;
|
|
|
|
pay credits (generally, a percentage of eligible compensation
credited annually based on length of service); and
|
|
|
|
interest credits (credited quarterly, based on the
30-Year
Treasury Bond rate for the November prior to each calendar year).
|
In addition, if a participant had attained at least age 55
by December 31, 1996 and had completed 10 or more years of
vesting service by December 31, 2001, the pension benefit
payable in an annuity form, other than a single life annuity,
will not be less than that which would have been payable from
the predecessor pension plan under which such participant was
covered on December 31, 1996.
Supplementary Executive Retirement Plan. To
allow the Retirement Program to provide benefits based on a
participants total compensation, Macys adopted the
SERP, which is a nonqualified unfunded plan. All benefits under
the SERP are payable out of the general corporate assets of
Macys. It provides retirement benefits to eligible
executives based on all eligible compensation, including
compensation in excess of Internal Revenue Code maximums, as
well as on amounts deferred under Macys Executive Deferred
Compensation Plan, referred to as the EDCP, in each case
employing a formula that is based on the participants
years of vesting service and final average compensation, taking
into consideration the participants balance in the CAPP,
the participants Prior Plan Credits (defined below) and
Social Security benefits. As of January 1, 2008,
approximately 750 employees were eligible to receive
benefits under the terms of the SERP. Macys has
58
reserved the right to suspend or terminate supplemental payments
as to any category of employee or former employee, or to modify
or terminate any other element of the Retirement Program, in
accordance with applicable law.
Eligible compensation for this purpose includes amounts
reflected in the 2007 Summary Compensation Table under the
headings Salary and Non-Equity Incentive Plan
Compensation but excludes amounts reflected in other
columns of such table and excludes bonus amounts that exceed
100% (160% for Mr. Lundgren) of salary.
In addition to the CAAP and the SERP, Macys Retirement
Program includes two profit sharing plans, the Macys
Profit Sharing 401(k) Investment Plan and The May Department
Stores Company Profit Sharing Plan (collectively, the
401(k) Plan). The 401(k) Plan permits executives to
contribute up to 8% of compensation (up to maximum amounts
established from time to time by the Internal Revenue Code) each
year. Macys matches contributions of up to 5% of eligible
compensation each year. The matching rate is discretionary, but
not less than
331/3%
of matchable contributions. The executive may choose any of
several investment funds for investment of the executives
balances, and may change those elections daily. Benefits may be
paid out at termination of employment. Executives may borrow
portions of their investment balances while employed. Company
contributions to the Named Executives under the 401(k) Plan are
reported in the All Other Compensation column of the
2007 Summary Compensation Table.
Prior to the adoption of the 401(k) Plan, Macys primary
means of providing retirement benefits to employees was through
defined contribution profit sharing plans. An employees
accumulated retirement profit sharing interests in the profit
sharing plans (the Prior Plan Credits) which accrued
prior to the adoption of the 401(k) Plan continue to be
maintained and invested as a part of the 401(k) Plan until
retirement, at which time they are distributed.
Non-qualified
Deferred Compensation Plans
Macys provides the opportunity for executives to defer
compensation through the Executive Deferred Compensation Plan,
referred to as the EDCP. Under the EDCP, eligible executives may
elect to defer a portion of their compensation each year as
either stock credits or cash credits. Stock credit accounts
reflect common stock equivalents and dividend equivalents.
Common stock equivalents are the number of full shares of
Macys common stock for each calendar quarter that could be
purchased based on the dollars deferred, and dividend
equivalents are determined by multiplying the dividends payable
upon a share of common stock to a stockholder of record during
such calendar quarter by the number of stock equivalents in the
participants stock credit account at the beginning of each
quarter, less the number of shares distributable or withdrawn
during each quarter in which the credit is being made. Total
value of the stock credits is determined at the end of each
quarter based on the closing price of the Companys common
stock as of the last day of the quarter. Cash credit accounts
reflect dollars deferred plus interest equivalents determined by
applying to 100% of such participants cash credits at the
beginning of each quarter, less amounts distributable or
withdrawn during such quarter, an interest rate equal to one
quarter of the interest rate payable on
U.S. 5-year
Treasury Notes as of the last day of each quarter. Deferred
compensation is distributed in the fiscal year following the
fiscal year in which termination of employment occurs.
59
2007
NONQUALIFIED DEFERRED COMPENSATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
|
Registrant
|
|
|
Aggregate
|
|
|
Aggregate
|
|
|
|
|
|
|
|
|
|
Contributions
|
|
|
Contributions
|
|
|
Earnings in Last
|
|
|
Withdrawals/
|
|
|
Aggregate Balance
|
|
|
|
Plan
|
|
|
in Last FY
|
|
|
in Last FY
|
|
|
FY(1)
|
|
|
Distributions
|
|
|
at Last FYE(2)
|
|
Name
|
|
Name
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Lundgren
|
|
|
EDCP
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Hoguet
|
|
|
EDCP
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Cole
|
|
|
EDCP
|
|
|
|
0
|
|
|
|
0
|
|
|
|
897
|
|
|
|
0
|
|
|
|
49,028
|
|
Grove
|
|
|
EDCP
|
|
|
|
0
|
|
|
|
0
|
|
|
|
6,510
|
|
|
|
0
|
|
|
|
355,628
|
|
Kronick
|
|
|
EDCP
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
(1) |
|
These amounts are not included in the Summary Compensation Table. |
|
(2) |
|
The compensation deferred by both Mr. Cole and
Ms. Grove is deferred as stock credits. The portion of
these amounts representing Mr. Coles and
Ms. Groves contributions was reported as compensation
to them in Summary Compensation Tables for the fiscal years in
which the compensation was earned. |
Potential
Payments Upon Termination or Change in Control
Termination
Payments under Employment Agreements
Upon certain types of terminations of employment (other than a
termination following a change in control of the company, which
is addressed below) severance benefits may be paid to the Named
Executives. The severance benefits payable to each of the Named
Executives are addressed in their employment agreements, and
they would receive the benefits provided under those agreements.
Mr. Terry Lundgren. In March 2007,
Macys entered into a new employment agreement with
Mr. Lundgren with an expiration date of February 28,
2011. Pursuant to this agreement, Mr. Lundgrens base
salary increased to $1,500,000 on March 1, 2007. He was
granted additional options to purchase 500,000 shares of
common stock at an exercise price of $44.67 per share, which was
the closing price of the stock on the trading day immediately
preceding the grant date of March 1, 2007. The grant has a
10-year term
and 100% of the option award vests on February 28, 2011. He
was also granted 75,000 shares of time-based restricted
stock, which fully vest on February 28, 2011. The agreement
also changed Mr. Lundgrens threshold
level of opportunity for the sales performance component under
the 1992 Bonus Plan from 0% to 10%.
Mr. Lundgrens employment agreement provides that if
Macys terminates his employment for reasons other than
cause or if Mr. Lundgren terminates his
employment for good reason he would be entitled to
receive all salary and target annual bonuses until the
expiration of the employment agreement. Under the terms of his
agreement, cause is defined generally to include:
|
|
|
|
|
willful and material breaches of duties;
|
|
|
|
habitual neglect of duties; or
|
|
|
|
the final conviction of a felony.
|
Generally, cause does not include bad judgment or
negligence, any act or omission believed by Mr. Lundgren in
good faith to have been in or not opposed to the interests of
Macys or any act or omission in respect of which a
determination could properly have been made by the Board that
Mr. Lundgren met the applicable standard of conduct
prescribed for indemnification or reimbursement under the
By-Laws or the laws of the State of Delaware.
60
Under the terms of his employment agreement, good
reason is defined generally to include:
|
|
|
|
|
assignment of any duties materially inconsistent with
Mr. Lundgrens position, authority, duties or
responsibilities, or any other action by Macys which
results in a material diminution in such position, authority,
duties or responsibilities;
|
|
|
|
any material failure by Macys to comply with any of the
provisions of the agreement;
|
|
|
|
failure of Mr. Lundgren to be reelected Chairman of the
Board of Macys or to be reelected to membership on the
Board; or
|
|
|
|
any purported termination by Macys of
Mr. Lundgrens employment otherwise than as expressly
permitted by the agreement.
|
In addition, Mr. Lundgrens agreement contains
non-compete, non-solicitation and mitigation clauses.
Other Named Executives. Macys has also
entered into employment agreements with each of the other Named
Executives. The current term of each agreement expires on
June 30, 2008. The agreements provide that in the event
that Macys terminates the executive other than for
cause the executive would be entitled to receive
base salary until the end of the term of the agreement. The term
cause has the same definition as previously
described above in the discussion of Mr. Lundgrens
agreement. In addition, the agreements contain similar
non-compete, non-solicitation and mitigation clauses.
Termination
Payments under
Change-in-Control
Agreements
Macys entered into a
change-in-control
agreement, referred to collectively as the
Change-in-Control
Agreements, with Mr. Lundgren and Mrs. Hoguet on
March 22, 2002 and with Mr. Cole, Ms. Grove and
Ms. Kronick on March 22, 2003. The term of each
Change-In-Control
Agreement ended November 1, 2007. On November 1, 2007,
each of the Named Executives and the company extended the term
of each applicable
Change-in-Control
Agreement one year, to November 1, 2008. See the
Change-in-Control
Agreements discussion in Compensation
Discussion & Analysis.
These agreements are intended to provide for continuity of
management in the event of a change in control of Macys.
The agreements provide that covered executive officers could be
entitled to certain severance benefits following a change in
control of Macys. If, following a change in control, the
executive officer is terminated for any reason, other than
death, disability or for cause, or if the executive officer
terminates his or her employment for good reason,
then the executive is entitled to:
|
|
|
|
|
a cash severance payment (generally paid in the form of a lump
sum) that will be equal to three times the sum of:
|
|
|
|
|
|
the executive officers base pay (at the higher of the rate
in effect at the change in control or the average rate over the
last three years), and
|
|
|
|
the higher of target annual bonus for the year of termination or
the highest annual bonus received for any year in the three full
calendar years immediately preceding the change in control; plus
|
|
|
|
|
|
a lump sum payment of any performance based stock credit awards
under Macys stock credit plans, at target, prorated to the
date of termination; plus
|
|
|
|
a lump sum payment of an annual bonus for the year of
termination, at target, prorated to the date of termination
(this feature applies to all executives in the 1992 Bonus Plan);
plus
|
61
|
|
|
|
|
release of any restrictions on restricted stock, including
performance restricted stock upon the change in control (this
feature applies to all participants with restricted stock
granted under the 1995 Equity Plan or the 1994 Stock Plan); plus
|
|
|
|
acceleration of any unvested stock options upon the change in
control (this feature applies to all participants with stock
options granted under the 1995 Equity Plan or the 1994 Stock
Plan); plus
|
|
|
|
a lump sum payment of all deferred compensation (this feature
applies to all participants in the deferred compensation plan);
plus
|
|
|
|
a lump sum payment of all retirement, supplementary retirement
and 401(k) benefits upon termination or retirement (this feature
applies to all participants in the retirement, supplementary
retirement and 401(k) plans); plus
|
|
|
|
a lump sum payment of retirement, supplementary retirement and
401(k) benefits the executive would have earned over the three
years after termination; plus
|
|
|
|
continuation of certain fringe benefits for 36 months after
termination, including:
|
|
|
|
|
|
life insurance coverage,
|
|
|
|
medical, vision and dental coverage, and
|
|
|
|
use of a company car; plus
|
|
|
|
|
|
a retiree discount for life if at least 55 years of age
with 10 years of service at termination (this feature
applies generally to all associates).
|
All of the above severance benefits would be paid to the
executive in accordance with, and at times permitted by
Section 409A of the Internal Revenue Code.
A change in control occurs in any of the following
events:
|
|
|
|
|
Macys is merged, consolidated or reorganized into or with
another corporation and, as a result of or immediately following
such merger, consolidation or reorganization, less than a
majority of the voting power of the other corporation
immediately after the transaction is held in the aggregate by
the holders of the voting stock of Macys immediately prior
to the transaction; or
|
|
|
|
Macys sells or otherwise transfers all or substantially
all of its assets to another corporation and, as a result of or
immediately following such sale or transfer, less than a
majority of the voting power of the then-outstanding securities
of the other corporation immediately after such sale or transfer
is held in the aggregate by the holders of voting stock of
Macys immediately before the transaction; or
|
|
|
|
a person discloses that the person has become the beneficial
owner of securities representing 25% or more of the combined
voting power of Macys; or
|
|
|
|
Macys discloses that a change in control of the company
has occurred or will occur in the future pursuant to any
then-existing contract or transaction; or
|
|
|
|
if, in any two-year period, individuals who, at the beginning of
the period, constitute the directors of Macys cease for
any reason to constitute at least a majority of the Board.
|
62
A change in control will not occur under either the third or
fourth bullet point above if Macys, an entity controlled
by Macys or an employee benefit plan of Macys or any
entity controlled by Macys discloses that it beneficially
owns securities, whether more than 25% or otherwise.
Good reason under the
Change-in-Control
Agreements means:
|
|
|
|
|
the failure to elect or reelect the executive in the office or
the position, or a substantially equivalent office or position,
of or with Macys which the executive held immediately
prior to the change in control; or
|
|
|
|
a significant adverse change in the nature or scope of the
authorities, powers, functions, responsibilities or duties
attached to the position which the executive held immediately
prior to the change in control; or
|
|
|
|
a reduction in the aggregate amount of the executives
combined base pay and incentive pay receivable from the company,
taken as a whole; or
|
|
|
|
the termination or denial of the executives rights to
employee benefits or a reduction in the scope or value thereof
(except for any such termination or denial or reduction in the
scope or value of any employee benefits applicable generally to
all recipients of or participants in such employee
benefits); or
|
|
|
|
a determination by the executive (which determination will be
conclusive and binding upon the parties, provided it has been
made in good faith and in all events will be presumed to have
been made in good faith unless otherwise shown by Macys by
clear and convincing evidence) that a change in circumstances
has occurred following a
change-in-control,
including without limitation a change in the scope of the
business or other activities for which the executive was
responsible immediately prior to the change in control, which
has rendered the executive substantially unable to carry out,
has substantially hindered the executives performance of,
or has caused the executive to suffer a substantial reduction
in, any of the authorities, powers, functions, responsibilities,
or duties attached to the position held by the executive
immediately prior to the change in control, which situation is
not remedied within 10 calendar days after written notice to the
company from the executive; or
|
|
|
|
the liquidation, dissolution, merger, consolidation or
reorganization of Macys or transfer of all or
substantially all of its business
and/or
assets, unless the successor shall have assumed all duties and
obligations of Macys under the
Change-in-Control
Agreement; or
|
|
|
|
Macys requires the executive to change the
executives principal location of work to any location
which is in excess of 25 miles from the location thereof
immediately prior to the change in control or requires the
executive to travel away from the executives office in the
course of discharging the executives responsibilities or
duties at least 20% more than was required in any of the three
full calendar years immediately prior to the change in
control; or
|
|
|
|
any material breach of the
Change-in-Control
Agreement by Macys.
|
The cash severance benefit payable under the
Change-in-Control
Agreements would be reduced by all amounts actually paid by
Macys to the executive pursuant to any other employment or
severance agreement or plan to which the executive and
Macys are parties or in which the executive is a
participant. In addition, the severance benefits under the
Change-in-Control
Agreements are subject to reduction in certain circumstances if
the excise tax imposed under 280G of the Internal Revenue Code
would reduce the net after-tax amount received by the executive.
63
The following tables summarize the amounts payable to the Named
Executives upon termination under certain circumstances,
assuming that:
|
|
|
|
|
the executives employment terminated February 2, 2008;
|
|
|
|
the executives salary continues as it existed on
February 2, 2008;
|
|
|
|
the executives employment contract and term as of
February 2, 2008 applies; and
|
|
|
|
the stock price for Macys common stock is $28.00 per share
(the closing price as of the last business day of fiscal 2007).
|
Payments
and Benefits upon Termination as of the end of Fiscal 2007
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary
|
|
|
Involuntary
|
|
|
After
|
|
|
|
|
|
|
|
|
|
|
|
|
Without
|
|
|
With
|
|
|
Change in
|
|
|
|
|
|
|
|
T. Lundgren
|
|
Voluntary
|
|
|
Cause
|
|
|
Cause
|
|
|
Control
|
|
|
Death
|
|
|
Disability
|
|
|
Severance and accelerated benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary and target bonus (to the end of contract term)
|
|
|
0
|
|
|
|
11,562,500
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Cash severance benefit (3 × salary plus target bonus)
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
14,428,200
|
|
|
|
0
|
|
|
|
0
|
|
Non-equity based incentive awards (2007 bonus)
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Equity Based incentive awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. Vesting of unvested stock options
|
|
|
0
|
|
|
|
205,906
|
|
|
|
0
|
|
|
|
205,906
|
|
|
|
205,906
|
|
|
|
205,906
|
|
b. Vesting of time-based restricted stock
|
|
|
0
|
|
|
|
2,100,000
|
|
|
|
0
|
|
|
|
2,100,000
|
|
|
|
2,100,000
|
|
|
|
2,100,000
|
|
c. Vesting of unvested stock credits
|
|
|
0
|
|
|
|
4,097,601
|
|
|
|
0
|
|
|
|
4,097,601
|
|
|
|
4,418,882
|
|
|
|
4,418,882
|
|
Cash balance pension lump sum equivalent
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
85,511
|
|
|
|
0
|
|
|
|
0
|
|
401(k) plan equivalent
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
18,000
|
|
|
|
0
|
|
|
|
0
|
|
Supplementary retirement plan lump sum equivalent
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
3,957,204
|
|
|
|
0
|
|
|
|
0
|
|
Other fringe benefits(a)
|
|
|
0
|
|
|
|
(a
|
)
|
|
|
0
|
|
|
|
558,105
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total of severance and accelerated benefits:
|
|
|
0
|
|
|
|
17,966,007
|
|
|
|
0
|
|
|
|
25,450,527
|
|
|
|
6,724,788
|
|
|
|
6,724,788
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Previously vested equity and benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Based incentive awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. Previously vested stock options
|
|
|
20,616,843
|
|
|
|
20,616,843
|
|
|
|
0
|
|
|
|
20,616,843
|
|
|
|
20,616,843
|
|
|
|
20,616,843
|
|
b. Previously vested stock credits
|
|
|
6,244,106
|
|
|
|
6,244,106
|
|
|
|
0
|
|
|
|
6,244,106
|
|
|
|
6,244,106
|
|
|
|
6,244,106
|
|
Vested cash balance pension benefit
|
|
|
147,507
|
|
|
|
147,507
|
|
|
|
147,547
|
|
|
|
147,507
|
|
|
|
147,507
|
|
|
|
147,507
|
|
Vested 401(k) plan balance
|
|
|
291,049
|
|
|
|
340,089
|
|
|
|
340,089
|
|
|
|
340,089
|
|
|
|
340,089
|
|
|
|
340,089
|
|
Vested supplementary retirement plan benefit
|
|
|
7,358,898
|
|
|
|
7,358,898
|
|
|
|
7,358,898
|
|
|
|
7,358,898
|
|
|
|
7,358,898
|
|
|
|
7,358,898
|
|
Other fringe benefits
|
|
|
200,000
|
|
|
|
200,000
|
|
|
|
0
|
|
|
|
200,000
|
|
|
|
0
|
|
|
|
200,000
|
|
Deferred compensation balance previously vested
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total of previously vested equity and benefits:
|
|
|
34,858,402
|
|
|
|
34,858,402
|
|
|
|
7,797,454
|
|
|
|
34,858,402
|
|
|
|
34,658,402
|
|
|
|
34,858,402
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full Walk-Away Value:
|
|
|
34,858,402
|
|
|
|
52,824,410
|
|
|
|
7,797,454
|
|
|
|
60,308,930
|
|
|
|
41,383,191
|
|
|
|
41,583,191
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
The CMD Committee retains flexibility to negotiate whether to
pay any amount for benefits for the remaining term of the
employment agreement. The
change-in-control
agreement provides for the value of benefits for three years
following termination. |
64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary
|
|
|
Involuntary
|
|
|
After
|
|
|
|
|
|
|
|
|
|
|
|
|
Without
|
|
|
With
|
|
|
Change in
|
|
|
|
|
|
|
|
K. Hoguet
|
|
Voluntary
|
|
|
Cause
|
|
|
Cause
|
|
|
Control
|
|
|
Death
|
|
|
Disability
|
|
|
Severance and accelerated benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary (to the end of contract term)
|
|
|
0
|
|
|
|
333,333
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Cash severance benefit (3 × salary plus target bonus)
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
4,990,800
|
|
|
|
0
|
|
|
|
0
|
|
Non-equity based incentive awards (2007 bonus)
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Equity Based incentive awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. Vesting of unvested stock options
|
|
|
0
|
|
|
|
41,181
|
|
|
|
0
|
|
|
|
41,181
|
|
|
|
41,181
|
|
|
|
41,181
|
|
b. Vesting of time-based restricted stock
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
1,176,000
|
|
|
|
1,176,000
|
|
|
|
1,176,000
|
|
c. Vesting of unvested stock credits
|
|
|
0
|
|
|
|
1,637,048
|
|
|
|
0
|
|
|
|
1,637,048
|
|
|
|
2,646,784
|
|
|
|
2,646,784
|
|
Cash balance pension lump sum equivalent
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
93,035
|
|
|
|
0
|
|
|
|
0
|
|
401(k) plan equivalent
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
18,000
|
|
|
|
0
|
|
|
|
0
|
|
Supplementary retirement plan lump sum equivalent
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
1,064,002
|
|
|
|
0
|
|
|
|
0
|
|
Other fringe benefits(a)
|
|
|
0
|
|
|
|
(a
|
)
|
|
|
0
|
|
|
|
305,922
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total of severance and accelerated benefits:
|
|
|
0
|
|
|
|
2,011,563
|
|
|
|
0
|
|
|
|
9,325,988
|
|
|
|
3,863,965
|
|
|
|
3,863,965
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Previously vested equity and benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Based incentive awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. Previously vested stock options
|
|
|
3,873,856
|
|
|
|
3,873,856
|
|
|
|
0
|
|
|
|
3,873,856
|
|
|
|
3,873,856
|
|
|
|
3,873,856
|
|
b. Previously vested stock credits
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Vested cash balance pension benefit
|
|
|
165,444
|
|
|
|
165,444
|
|
|
|
165,444
|
|
|
|
165,444
|
|
|
|
165,444
|
|
|
|
165,444
|
|
Vested 401(k) plan balance
|
|
|
678,866
|
|
|
|
678,866
|
|
|
|
678,886
|
|
|
|
678,886
|
|
|
|
678,886
|
|
|
|
675,886
|
|
Vested supplementary retirement plan benefit
|
|
|
2,001,870
|
|
|
|
2,001,870
|
|
|
|
2,001,870
|
|
|
|
2,001,870
|
|
|
|
2,001,870
|
|
|
|
2,001,870
|
|
Other fringe benefits
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Deferred compensation balance previously vested
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total of previously vested equity and benefits:
|
|
|
6,720,056
|
|
|
|
6,720,056
|
|
|
|
2,846,200
|
|
|
|
6,720,056
|
|
|
|
6,720,056
|
|
|
|
6,720,056
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full Walk-Away Value:
|
|
|
6,720,056
|
|
|
|
8,731,618
|
|
|
|
2,846,200
|
|
|
|
16,046,044
|
|
|
|
10,584,021
|
|
|
|
10,584,021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
The CMD Committee retains flexibility to negotiate whether to
pay any amount for benefits for the remaining term of the
employment agreement. The
change-in-control
agreement provides for the value of benefits for three years
following termination. |
65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary
|
|
|
Involuntary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Without
|
|
|
With
|
|
|
After Change in
|
|
|
|
|
|
|
|
T. Cole
|
|
Voluntary
|
|
|
Cause
|
|
|
Cause
|
|
|
Control
|
|
|
Death
|
|
|
Disability
|
|
|
Severance and accelerated benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary (to the end of contract term)
|
|
|
0
|
|
|
|
406,250
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Cash severance benefit (3 × salary plus target bonus)
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
5,911,500
|
|
|
|
0
|
|
|
|
0
|
|
Non-equity based incentive awards (2007 bonus)
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Equity Based incentive awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. Vesting of unvested stock options
|
|
|
0
|
|
|
|
48,669
|
|
|
|
0
|
|
|
|
48,669
|
|
|
|
48,669
|
|
|
|
48,669
|
|
b. Vesting of time-based restricted stock
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
1,400,000
|
|
|
|
1,400,000
|
|
|
|
1,400,000
|
|
c. Vesting of unvested stock credits
|
|
|
0
|
|
|
|
900,376
|
|
|
|
0
|
|
|
|
900,376
|
|
|
|
1,019,712
|
|
|
|
1,019,712
|
|
Cash balance pension lump sum equivalent
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
135,402
|
|
|
|
0
|
|
|
|
0
|
|
401(k) plan equivalent
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
18,000
|
|
|
|
0
|
|
|
|
0
|
|
Supplementary retirement plan lump sum equivalent
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
1,794,496
|
|
|
|
0
|
|
|
|
0
|
|
Other fringe benefits(a)
|
|
|
0
|
|
|
|
(a
|
)
|
|
|
0
|
|
|
|
276,813
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total of severance and accelerated benefits:
|
|
|
0
|
|
|
|
1,355,295
|
|
|
|
0
|
|
|
|
10,485,262
|
|
|
|
2,468,381
|
|
|
|
2,468,381
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Previously vested equity and benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Based incentive awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. Previously vested stock options
|
|
|
1,934,271
|
|
|
|
1,934,271
|
|
|
|
0
|
|
|
|
1,934,271
|
|
|
|
1,934,271
|
|
|
|
1,934,271
|
|
b. Previously vested stock credits
|
|
|
1,810,696
|
|
|
|
1,810,696
|
|
|
|
0
|
|
|
|
1,810,696
|
|
|
|
1,810,696
|
|
|
|
1,810,696
|
|
Vested cash balance pension benefit
|
|
|
396,867
|
|
|
|
396,867
|
|
|
|
396,867
|
|
|
|
396,867
|
|
|
|
396,867
|
|
|
|
396,867
|
|
Vested 401(k) plan balance
|
|
|
1,042,915
|
|
|
|
1,042,915
|
|
|
|
1,042,915
|
|
|
|
1,042,915
|
|
|
|
1,042,915
|
|
|
|
1,042,915
|
|
Vested supplementary retirement plan benefit
|
|
|
5,177,993
|
|
|
|
5,177,993
|
|
|
|
5,177,993
|
|
|
|
5,177,993
|
|
|
|
5,177,993
|
|
|
|
5,177,993
|
|
Other fringe benefits
|
|
|
500,000
|
|
|
|
500,000
|
|
|
|
0
|
|
|
|
500,000
|
|
|
|
0
|
|
|
|
500,000
|
|
Deferred compensation balance, previously vested
|
|
|
49,028
|
|
|
|
49,028
|
|
|
|
49,028
|
|
|
|
49,028
|
|
|
|
49,028
|
|
|
|
49,028
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total of previously vested equity and benefits:
|
|
|
10,911,770
|
|
|
|
10,911,770
|
|
|
|
6,666,803
|
|
|
|
10,911,770
|
|
|
|
10,411,770
|
|
|
|
10,911,770
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full Walk-Away Value:
|
|
|
10,911,770
|
|
|
|
12,267,065
|
|
|
|
6,666,803
|
|
|
|
21,880,151
|
|
|
|
12,880,151
|
|
|
|
13,380,151
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
The CMD Committee retains flexibility to negotiate whether to
pay any amount for benefits for the remaining term of the
employment agreement. The
change-in-control
agreement provides for the value of benefits for three years
following termination. |
66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary
|
|
|
Involuntary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Without
|
|
|
With
|
|
|
After Change in
|
|
|
|
|
|
|
|
J. Grove
|
|
Voluntary
|
|
|
Cause
|
|
|
Cause
|
|
|
Control
|
|
|
Death
|
|
|
Disability
|
|
|
Severance and accelerated benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary (to the end of contract term)
|
|
|
0
|
|
|
|
406,250
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Cash severance benefit (3 × salary plus target bonus)
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
5,911,500
|
|
|
|
0
|
|
|
|
0
|
|
Non-equity based incentive awards (2007 bonus)
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Equity Based incentive awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. Vesting of unvested stock options
|
|
|
0
|
|
|
|
48,669
|
|
|
|
0
|
|
|
|
48,669
|
|
|
|
48,669
|
|
|
|
48,669
|
|
b. Vesting of time-based restricted stock
|
|
|
0
|
|
|
|
14,000
|
|
|
|
0
|
|
|
|
1,414,000
|
|
|
|
1,414,000
|
|
|
|
1,414,000
|
|
c. Vesting of unvested stock credits
|
|
|
0
|
|
|
|
900,376
|
|
|
|
0
|
|
|
|
900,376
|
|
|
|
1,019,712
|
|
|
|
1,019,712
|
|
Cash balance pension lump sum equivalent
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
124,213
|
|
|
|
0
|
|
|
|
0
|
|
401(k) plan equivalent
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
18,000
|
|
|
|
0
|
|
|
|
0
|
|
Supplementary retirement plan lump sum equivalent
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
1,549,168
|
|
|
|
0
|
|
|
|
0
|
|
Other fringe benefits(a)
|
|
|
0
|
|
|
|
(a
|
)
|
|
|
0
|
|
|
|
227,403
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total of severance and accelerated benefits:
|
|
|
0
|
|
|
|
1,369,295
|
|
|
|
0
|
|
|
|
10,193,329
|
|
|
|
2,482,381
|
|
|
|
2,482,381
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Previously vested equity and benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Based incentive awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. Previously vested stock options
|
|
|
2,746,242
|
|
|
|
2,746,242
|
|
|
|
0
|
|
|
|
2,746,242
|
|
|
|
2,746,242
|
|
|
|
2,746,242
|
|
b. Previously vested stock credits
|
|
|
1,810,696
|
|
|
|
1,810,696
|
|
|
|
0
|
|
|
|
1,810,696
|
|
|
|
1,810,696
|
|
|
|
1,810,696
|
|
Vested cash balance pension benefit
|
|
|
333,540
|
|
|
|
333,540
|
|
|
|
333,540
|
|
|
|
333,540
|
|
|
|
333,540
|
|
|
|
333,540
|
|
Vested 401(k) plan balance
|
|
|
412,209
|
|
|
|
412,209
|
|
|
|
412,209
|
|
|
|
412,209
|
|
|
|
412,209
|
|
|
|
412,209
|
|
Vested supplementary retirement plan benefit
|
|
|
4,646,950
|
|
|
|
4,646,950
|
|
|
|
4,646,950
|
|
|
|
4,646,950
|
|
|
|
4,646,950
|
|
|
|
4,646,950
|
|
Other fringe benefits
|
|
|
500,000
|
|
|
|
500,000
|
|
|
|
0
|
|
|
|
500,000
|
|
|
|
0
|
|
|
|
500,000
|
|
Deferred compensation balance previously vested
|
|
|
355,628
|
|
|
|
355,628
|
|
|
|
355,628
|
|
|
|
355,628
|
|
|
|
355,628
|
|
|
|
355,628
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total of previously vested equity and benefits:
|
|
|
10,805,265
|
|
|
|
10,805,265
|
|
|
|
5,748,327
|
|
|
|
10,805,265
|
|
|
|
10,305,265
|
|
|
|
10,805,265
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full Walk-Away Value:
|
|
|
10,805,265
|
|
|
|
12,174,560
|
|
|
|
5,748,327
|
|
|
|
20,998,594
|
|
|
|
12,787,646
|
|
|
|
13,287,646
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
The CMD Committee retains flexibility to negotiate whether to
pay any amount for benefits for the remaining term of the
employment agreement. The
change-in-control
agreement provides for the value of benefits for three years
following termination. |
67
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary
|
|
|
Involuntary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Without
|
|
|
With
|
|
|
After Change in
|
|
|
|
|
|
|
|
S. Kronick
|
|
Voluntary
|
|
|
Cause
|
|
|
Cause
|
|
|
Control
|
|
|
Death
|
|
|
Disability
|
|
|
Severance and accelerated benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary (to the end of contract term)
|
|
|
0
|
|
|
|
458,333
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Cash severance benefit (3 × salary plus target bonus)
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
7,275,300
|
|
|
|
0
|
|
|
|
0
|
|
Non-equity based incentive awards (2007 bonus)
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Equity Based incentive awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. Vesting of unvested stock options
|
|
|
0
|
|
|
|
48,669
|
|
|
|
0
|
|
|
|
48,669
|
|
|
|
48,669
|
|
|
|
48,669
|
|
b. Vesting of time-based restricted stock
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
1,400,000
|
|
|
|
1,400,000
|
|
|
|
1,400,000
|
|
c. Vesting of unvested stock credits
|
|
|
0
|
|
|
|
900,376
|
|
|
|
0
|
|
|
|
900,376
|
|
|
|
1,019,712
|
|
|
|
1,019,712
|
|
Cash balance pension lump sum equivalent
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
115,261
|
|
|
|
0
|
|
|
|
0
|
|
401(k) plan equivalent
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
18,000
|
|
|
|
0
|
|
|
|
0
|
|
Supplementary retirement plan lump sum equivalent
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
1,283,500
|
|
|
|
0
|
|
|
|
0
|
|
Other fringe benefits(a)
|
|
|
0
|
|
|
|
(a
|
)
|
|
|
0
|
|
|
|
441,876
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total of severance and accelerated benefits:
|
|
|
0
|
|
|
|
1,407,379
|
|
|
|
0
|
|
|
|
11,482,982
|
|
|
|
2,468,381
|
|
|
|
2,468,381
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Previously vested equity and benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Based incentive awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. Previously vested stock options
|
|
|
3,783,147
|
|
|
|
3,783,147
|
|
|
|
0
|
|
|
|
3,783,147
|
|
|
|
3,783,147
|
|
|
|
3,783,147
|
|
b. Previously vested stock credits
|
|
|
1,810,696
|
|
|
|
1,810,696
|
|
|
|
0
|
|
|
|
1,810,696
|
|
|
|
1,810,696
|
|
|
|
1,810,696
|
|
Vested cash balance pension benefit
|
|
|
285,342
|
|
|
|
285,342
|
|
|
|
285,342
|
|
|
|
285,342
|
|
|
|
285,342
|
|
|
|
285,342
|
|
Vested 401(k) plan balance
|
|
|
1,174,030
|
|
|
|
1,174,030
|
|
|
|
1,174,030
|
|
|
|
1,174,030
|
|
|
|
1,174,030
|
|
|
|
1,174,030
|
|
Vested supplementary retirement plan benefit
|
|
|
5,148,458
|
|
|
|
5,148,458
|
|
|
|
5,148,458
|
|
|
|
5,148,458
|
|
|
|
5,148,458
|
|
|
|
5,148,458
|
|
Other fringe benefits
|
|
|
500,000
|
|
|
|
500,000
|
|
|
|
0
|
|
|
|
500,000
|
|
|
|
0
|
|
|
|
500,000
|
|
Deferred compensation balance previously vested
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total of previously vested equity and benefits:
|
|
|
12,701,672
|
|
|
|
12,701,672
|
|
|
|
6,607,830
|
|
|
|
12,701,672
|
|
|
|
12,201,672
|
|
|
|
12,701,672
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full Walk-Away Value:
|
|
|
12,701,672
|
|
|
|
14,109,051
|
|
|
|
6,607,830
|
|
|
|
24,184,655
|
|
|
|
14,670,053
|
|
|
|
15,170,053
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
The CMD Committee retains flexibility to negotiate whether to
pay any amount for benefits for the remaining term of the
employment agreement. The
change-in-control
agreement provides for the value of benefits for three years
following termination. |
68
Matching
Gift Program
All Macys employees, including the Named Executives, may
participate in the matching gift program of the Macys
Foundation. Under this program, the Macys Foundation will
match up to a total of $22,500 in gifts made by the employee to
approved charities in any calendar year.
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the
Exchange Act) requires Macys directors and
executive officers, and certain persons who beneficially own
more than 10% of the common stock outstanding, to file with the
SEC and the NYSE initial reports of ownership and reports of
changes in ownership of common stock. Executive officers,
directors and greater than 10% stockholders are required by SEC
regulation to furnish Macys with copies of all
Section 16(a) reports they file.
To Macys knowledge, based solely on a review of the copies
of reports furnished to Macys and written representations
signed by all directors and executive officers that no other
reports were required with respect to their beneficial ownership
of common stock during fiscal 2007, all reports required by
Section 16(a) of the Exchange Act to be filed by the
directors and executive officers and all beneficial owners of
more than 10% of the common stock outstanding to report
transactions in securities were timely filed.
COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None.
POLICY ON
RELATED PERSON TRANSACTIONS
Under Item 404(a) of
Regulation S-K,
Macys is required to disclose transactions in which
Macys was or is to be a participant, in which the amount
involved exceeds $120,000 and in which any Director, executive
officer or 5% or greater stockholder (or any immediate family
member of any such person) has a direct or indirect material
interest. All Directors and executive officers annually
complete, sign and submit a Directors and Officers
Questionnaire that is designed to identify related person
transactions and both actual and potential conflicts of
interest. Macys also makes appropriate inquiries as to the
nature and extent of business that the company conducts with
other companies for whom any of these individuals also serve as
directors or executive officers. Macys general counsel
reviews any identified transactions and determines, based on the
facts and circumstances, whether the Director or executive
officer has a direct or indirect material interest in the
transaction. If he determines that the individual has a direct
or indirect material interest in a transaction he brings the
matter to the attention of the NCG Committee for further review.
Based upon records available to the company, there were no
transactions in fiscal 2007, and there are no currently proposed
transactions, in which Macys was or is to be a
participant, in which the amount involved exceeded $120,000 and
in which any of the companys Directors, executive officers
or 5% or greater stockholders (or any immediate family member of
any such person) either had or will have a direct or indirect
material interest.
In addition, under its Code of Business Conduct and Ethics,
Macys requires all employees, including its officers and
Non-Employee Directors, to avoid situations that may impact
their ability to carry out their duties in an independent and
objective fashion, including by having a financial interest in
suppliers. Any circumstances that may compromise their ability
to perform independently must be disclosed to Macys
general counsel, or in the case of the Named Executives and the
Non-Employee Directors, must be disclosed to the chair of the
NCG Committee.
69
REPORT OF
THE AUDIT COMMITTEE
The Board has adopted a written Audit Committee Charter. All
members of the Audit Committee are independent, as defined in
Sections 303A.06 and 303A.07 of the NYSEs listing
standards.
The Audit Committee has reviewed and discussed with Macys
management and KPMG LLP, the audited financial statements of
Macys contained in Macys Annual Report to
stockholders for fiscal 2007. The Audit Committee has also
discussed with KPMG LLP the matters required to be discussed
pursuant to SAS No. 61 (Codification of Statements on
Auditing Standards, Communications with Audit Committees).
The Audit Committee has received and reviewed the written
disclosures and the letter from KPMG LLP required by
Independence Standards Board Standard No. 1 (titled,
Independence Discussions with Audit
Committees), and has discussed with KPMG LLP their
independence.
Based on the review and discussions referred to above, the Audit
Committee recommended to the Board that the audited financial
statements be included in Macys Annual Report on
Form 10-K
for fiscal 2007, filed with the United States Securities and
Exchange Commission.
Respectfully submitted,
Marna C. Whittington, Chairperson
Stephen F. Bollenbach
Joseph Neubauer
Joyce M. Roché
70
SUBMISSION
OF FUTURE STOCKHOLDER PROPOSALS
Proposals for the 2009 Annual Meeting. You may
submit proposals on matters appropriate for stockholder action
at Macys annual stockholders meetings in accordance
with
Rule 14a-8
promulgated under the Exchange Act
(Rule 14a-8).
For such proposals to be included in Macys proxy materials
relating to its 2009 annual meeting of stockholders, you must
satisfy all applicable requirements of
Rule 14a-8
and Macys must receive such proposals no later than
December 12, 2008.
Except in the case of proposals made in accordance with
Rule 14a-8,
the By-Laws require that stockholders intending to bring any
business before an annual meeting of stockholders deliver
written notice thereof to the Secretary of Macys not less
than 60 days prior to the meeting. However, in the event
that the date of the meeting is not publicly announced by
Macys by inclusion in a report filed with the SEC or
furnished to stockholders, or by mail, press release or
otherwise at least 75 days prior to the meeting, notice by
the stockholder to be timely must be delivered to the Secretary
of Macys not later than the close of business on the tenth
day following the day on which such announcement of the date of
the meeting was so communicated. The By-Laws further require,
among other things, that the notice by the stockholder set forth
a description of the business to be brought before the meeting
and certain information concerning the stockholder proposing
such business, including such stockholders name and
address, the class and number of shares of Macys capital
stock that are owned beneficially by such stockholder and any
material interest of such stockholder in the business proposed
to be brought before the meeting. The chairman of the meeting
may refuse to permit to be brought before the meeting any
stockholder proposal (other than a proposal made in accordance
with
Rule 14a-8)
not made in compliance with these requirements. Similar
procedures prescribed by the By-Laws are applicable to
stockholders desiring to nominate candidates for election as
directors. See Further Information Concerning the Board of
Directors Director Nomination Procedures.
71
OTHER
MATTERS
The Board knows of no other business that will be presented for
consideration at the annual meeting other than that described in
this proxy statement. However, if any business shall properly
come before the annual meeting, the persons named in the
enclosed form of proxy or their substitutes will vote said proxy
in respect of any such business in accordance with their best
judgment pursuant to the discretionary authority conferred
thereby.
The cost of preparing, assembling and mailing the proxy material
will be borne by Macys. Macys Annual Report for
fiscal 2007, which is being mailed to the stockholders with this
proxy statement, is not to be regarded as proxy soliciting
material. Macys may solicit proxies otherwise than by the
use of the mails, in that certain officers and regular employees
of Macys, without additional compensation, may use their
personal efforts, by telephone or otherwise, to obtain proxies.
Macys will also request persons, firms and corporations
holding shares in their names, or in the name of their nominees,
which are beneficially owned by others, to send proxy material
to and obtain proxies from such beneficial owners and will
reimburse such holders for their reasonable expenses in so
doing. In addition, Macys has engaged the firm of
Georgeson, Inc., of New York City, to assist in the solicitation
of proxies on behalf of the Board. Georgeson will solicit
proxies with respect to common stock held by brokers, bank
nominees, other institutional holders and certain individuals,
and will perform related services. It is anticipated that the
cost of the solicitation service to Macys will not
substantially exceed $9,000.
Dennis J. Broderick
Secretary
April 1, 2008
PLEASE CAST YOUR VOTE BY FOLLOWING THE INSTRUCTIONS ON THE
ENCLOSED PROXY CARD. IF YOU CHOOSE TO CAST YOUR VOTE BY
COMPLETING THE
ENCLOSED PROXY CARD, PLEASE RETURN IT PROMPTLY IN THE
ENCLOSED ADDRESSED ENVELOPE, WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES.
72
Appendix A
POLICY
AND PROCEDURES FOR PRE-APPROVAL OF NON-AUDIT
SERVICES BY OUTSIDE AUDITORS
|
|
I.
|
Authority
to Approve Non-Audit Services
|
Except as noted below, the Audit Committee (the
Committee) will approve in advance all permitted
non-audit
services1
(the Permitted NAS).
A. The Committee may delegate to the Chair of the Committee
the authority to pre-approve Permitted NAS; provided that any
such pre-approval of Permitted NAS granted by any such delegee
must be presented to the Committee at its meeting next following
the approval.
B. Pre-approval is not required for any Permitted NAS if:
1. the aggregate amount of any such Permitted NAS
constitutes no more than five percent (5%) of the total revenues
paid by Macys to its auditors during the fiscal year in
which the Permitted NAS are provided;
2. the Permitted NAS were not recognized at the time of the
auditors engagement to be a Permitted NAS (i.e.,
either a service indicated as an audit service at the time of
the engagement evolves over the course of the engagement to
become a non-audit service, or a non-audit service not
contemplated at all at the time of the engagement is performed
by the outside auditor after the engagement is
approved); and
3. the Permitted NAS are promptly brought to the attention
of the Committee (or its delegee) by management and approved
prior to the completion of the audit.
|
|
II.
|
Disclosure
of Permitted Non-Audit Services in Outside Auditors
Engagement Letter
|
A. The Committee is to receive an itemization in the
outside auditors engagement letter of Permitted NAS that
the outside auditors propose to deliver to Macys during
the course of the year covered by the engagement and
contemplated at the time of the engagement.
1. In its submissions to management covering its proposed
engagement the outside auditors are to include a statement that
the delivery of Permitted NAS during the preceding fiscal year
did not impair the independence of the outside auditors.
B. Whether a Permitted NAS is set out in the auditor
engagement letter or proposed by the outside auditors subsequent
to the time the engagement letter is submitted, the Committee
(or its delegee as described above) is to consider, with input
from management, whether delivery of the Permitted NAS impairs
independence of the outside auditors.
1. The Committee is to evaluate, in making such
consideration, the non-audit factors and other related
principles (the Qualifying Factors) set out below.
1 The
nine categories of prohibited non-audit services are:
(i) bookkeeping or other services related to the accounting
records or financial statements of the audit client;
(ii) financial information systems design and
implementation; (iii) appraisal or valuation services,
fairness opinions, or
contribution-in-kind
reports; (iv) actuarial services; (v) internal audit
outsourcing; (vi) management functions or human resources;
(vii) broker or dealer, investment adviser, or investment
banking services; (viii) legal services and expert services
unrelated to the audit; and (ix) any other service that the
Public Company Accounting Oversight Board determines, by
regulation, is impermissible.
A-1
|
|
|
|
|
Whether the service is being performed principally for the Audit
Committee;
|
|
|
|
The effects of the service, if any, on audit effectiveness or on
the quality and timeliness of Macys financial reporting
process;
|
|
|
|
Whether the service would be performed by specialists (e.g.,
technology specialists) who ordinarily also provide recurring
audit support;
|
|
|
|
Whether the service would be performed by outside audit
personnel and, if so, whether it will enhance their knowledge of
Macys business and operations;
|
|
|
|
Whether the role of those performing the service (e.g., a role
where neutrality, impartiality and auditor skepticism are likely
to be subverted) would be inconsistent with the outside
auditors role;
|
|
|
|
Whether the outside audit firms personnel would be
assuming a management role or creating a mutuality of interest
with Macys management;
|
|
|
|
Whether the outside auditors, in effect, would be auditing their
own numbers;
|
|
|
|
Whether the project must be started and completed very quickly;
|
|
|
|
Whether the outside audit firm has unique expertise in the
service;
|
|
|
|
Whether the service entails the outside auditor serving in an
advocacy role for Macys; and
|
|
|
|
The size of the fee(s) for the non-audit service(s).
|
III. Annual
Assessment of Policy
The Committee will determine on an annual basis whether to amend
this policy.
A-2
VOTE BY INTERNET www.proxyvote.com Use the Internet to transmit your voting instructions and for
electronic delivery of information up until 11:59 P.M. Eastern Time on May 15, 2008. Have your
proxy card in hand when you access the web site and follow the instructions to obtain your records
and to create an electronic voting instruction form. MACYS, INC. ELECTRONIC DELIVERY OF FUTURE
STOCKHOLDER COMMUNICATIONS 7 WEST 7TH STREET If you would like to reduce the costs incurred by
Macys, Inc. in mailing proxy materials, you can consent to receiving all future proxy statements,
proxy CINCINNATI, OH 45202-2471 cards and annual reports electronically via e-mail or the Internet.
To sign up for electronic delivery, please follow the instructions above to vote using the Internet
and, when prompted, indicate that you agree to receive or access stockholder communications
electronically in future years. VOTE BY PHONE 1-800-690-6903 Use any touch-tone telephone to
transmit your voting instructions up until 11:59 P.M. Eastern Time on May 15, 2008. Have your proxy
card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your
proxy card and return it in the postage-paid envelope we have provided or return it to Macys,
Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR
BLACK INK AS FOLLOWS: MACYS1 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. MACYS, INC. For Withhold For All To withhold
authority to vote for any individual All All Except nominee(s), mark For All Except and write the
THE BOARD OF DIRECTORS RECOMMEND A VOTE FOR number(s) of the nominee(s) on the line below. ITEMS
1 AND 2. Vote on Directors 0 0 0 1. ELECTION OF DIRECTORS Nominees: 01) Stephen F. Bollenbach 05)
Terry J. Lundgren 09) Karl M. von der Heyden 02) Deirdre P. Connelly 06) Joseph Neubauer 10) Craig
E. Weatherup 03) Meyer Feldberg 07) Joseph A. Pichler 11) Marna C. Whittington 04) Sara Levinson
08) Joyce M. Roché For Against Abstain Vote on Proposal 2. To ratify the appointment of KPMG LLP as
Macys independent registered public accounting firm for the fiscal year ending January 31, 2009. 0
0 0 3. In their discretion, upon such other matters that may properly come before the meeting or
any adjournment or adjournments thereof. The shares represented by this proxy when properly
executed will be voted in the manner directed herein by the undersigned Stockholder(s). If no
direction is made, this proxy will be voted FOR Items 1 and 2. If any other matters properly come
before the meeting, the person(s) named in this proxy will vote in their discretion. For purposes
of the 2008 Annual Meeting, proxies will be held in confidence (subject to certain exceptions as
set forth in the Proxy Statement) unless the undersigned checks the box below and provides comments
where indicated on the reverse side. For address changes and/or comments, please check this box 0
and write them on the back where indicated. Please sign your name exactly as it appears hereon.
When signing as attorney, executor, administrator, trustee or guardian, please add your
title as such. When signing as joint tenants, all parties in the joint tenancy must sign. If a
signer is a corporation, please sign in full corporate name by duly authorized officer. Signature
[PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date |
Important Notice Regarding Internet Availability of Proxy Materials for the Annual Meeting: The
Annual Report, Form 10-K and Proxy Statement are available at www.proxyvote.com. MACYS, INC. THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS ANNUAL MEETING OF STOCKHOLDERS May 16, 2008
The undersigned stockholder(s) hereby appoint(s) Meyer Feldberg and Marna C. Whittington, or
either of them, as proxies, each with the power to appoint his or her substitute, and
hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot,
all of the shares of Common Stock of Macys, Inc. that the stockholder(s) is/are entitled to vote
at the Annual Meeting of Stockholders to be held at 11:00 a.m. Eastern Time on May 16, 2008, at the
Macys Inc. corporate offices located at 7 West 7th Street, Cincinnati, Ohio 45202, and any
adjournment or postponement thereof. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED
BY THE STOCKHOLDER(S). IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION
OF ALL NOMINEES FOR THE BOARD OF DIRECTORS LISTED IN ITEM 1 ON THE REVERSE SIDE AND FOR ITEM 2 ,
AND WILL BE VOTED IN THE DISCRETION OF THE PROXIES IN RESPECT OF SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE ANNUAL MEETING. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED REPLY ENVELOPE Address Changes/Comments: ___
___(If you noted any Address Changes/Comments above, please mark
corresponding box on the reverse side.) CONTINUED AND TO BE SIGNED ON REVERSE SIDE |
VOTE BY INTERNET www.proxyvote.com Use the Internet to transmit your voting instructions and for
electronic delivery of information up until 11:59 P.M. Eastern Time on May 14, 2008. Have your
proxy card in hand when you access the web site and follow the instructions to obtain your records
and to create an electronic voting instruction form. MACYS, INC. ELECTRONIC DELIVERY OF FUTURE
STOCKHOLDER COMMUNICATIONS 7 WEST 7TH STREET If you would like to reduce the costs incurred by
Macys, Inc. in mailing proxy materials, you can consent to receiving all future proxy statements,
proxy CINCINNATI, OH 45202-2471 cards and annual reports electronically via e-mail or the Internet.
To sign up for electronic delivery, please follow the instructions above to vote using the Internet
and, when prompted, indicate that you agree to receive or access stockholder communications
electronically in future years. VOTE BY PHONE 1-800-690-6903 Use any touch-tone telephone to
transmit your voting instructions up until 11:59 P.M. Eastern Time on May 14, 2008. Have your proxy
card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your
proxy card and return it in the postage-paid envelope we have provided or return it to Macys,
Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR
BLACK INK AS FOLLOWS: MACYS3 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. MACYS, INC. For Withhold For All To withhold
authority to vote for any individual All All Except nominee(s), mark For All Except and write the
THE BOARD OF DIRECTORS RECOMMEND A VOTE FOR number(s) of the nominee(s) on the line below. ITEMS
1 AND 2. Vote on Directors 0 0 0 1. ELECTION OF DIRECTORS Nominees: 01) Stephen F. Bollenbach 05)
Terry J. Lundgren 09) Karl M. von der Heyden 02) Deirdre P. Connelly 06) Joseph Neubauer 10) Craig
E. Weatherup 03) Meyer Feldberg 07) Joseph A. Pichler 11) Marna C. Whittington 04) Sara Levinson
08) Joyce M. Roché For Against Abstain Vote on Proposal 2. To ratify the appointment of KPMG LLP as
Macys independent registered public accounting firm for the fiscal year ending January 31, 2009. 0
0 0 3. In their discretion, upon such other matters that may properly come before the meeting or
any adjournment or adjournments thereof. The shares represented by this proxy when properly
executed will be voted in the manner directed herein by the undersigned Stockholder(s). If no
direction is made, this proxy will be voted FOR Items 1 and 2. If any other matters properly come
before the meeting, the person(s) named in this proxy will vote in their discretion. For purposes
of the 2008 Annual Meeting, proxies will be held in confidence (subject to certain exceptions as
set forth in the Proxy Statement) unless the undersigned checks the box below and provides comments
where indicated on the reverse side. For address changes and/or comments, please check this box 0
and write them on the back where indicated. Please sign your name exactly as it appears hereon.
When signing as attorney, executor, administrator, trustee or guardian, please add your
title as such. When signing as joint tenants, all parties in the joint tenancy must sign. If a
signer is a corporation, please sign in full corporate name by duly authorized officer. Signature
[PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date |
Important Notice Regarding Internet Availability of Proxy Materials for the Annual Meeting: The
Annual Report, Form 10-K and Proxy Statement are available at www.proxyvote.com. MACYS, INC. To:
J.P. Morgan Chase Bank, as Trustee for the Macys, Inc. Profit Sharing 401(k) Investment Plan.
ANNUAL MEETING OF STOCKHOLDERS May 16, 2008 I acknowledge receipt of the Letter to Stockholders,
the Notice of Annual Meeting of Stockholders of Macys, Inc. to be held on May 16, 2008, and the
related Proxy Instructions. As to my proportional interest in any stock of Macys, Inc. registered
in your name, you are directed as indicated on the reverse side as to the matters listed in the
form of Proxy solicited by the Board of Directors of Macys. I understand that if I sign this
instruction card on the other side without otherwise indicating my voting instructions, it will be
understood that I wish my proportional interest in the shares to be voted by you in accordance with
the recommendations of the Board of Directors of Macys as to Items 1 and 2. If any such stock is
registered in the name of your nominee, the authority and directions herein shall extend to such
nominee. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE STOCKHOLDER(S). IF
NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES FOR THE
BOARD OF DIRECTORS LISTED IN ITEM 1 ON THE REVERSE SIDE AND FOR ITEM 2. PLEASE MARK, SIGN, DATE
AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE Address Changes/Comments:
___(If you noted any Address Changes/Comments
above, please mark corresponding box on the reverse side.) CONTINUED AND TO BE SIGNED ON REVERSE
SIDE |
VOTE BY INTERNET www.proxyvote.com Use the Internet to transmit your voting instructions and for
electronic delivery of information up until 11:59 P.M. Eastern Time on May 14, 2008. Have your
proxy card in hand when you access the web site and follow the instructions to obtain your records
and to create an electronic voting instruction form. MACYS, INC. ELECTRONIC DELIVERY OF FUTURE
STOCKHOLDER COMMUNICATIONS 7 WEST 7TH STREET If you would like to reduce the costs incurred by
Macys, Inc. in mailing proxy CINCINNATI, OH 45202-2471 materials, you can consent to receiving all
future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet.
To sign up for electronic delivery, please follow the instructions above to vote using the Internet
and, when prompted, indicate that you agree to receive or access stockholder communications
electronically in future years. VOTE BY PHONE 1-800-690-6903 Use any touch-tone telephone to
transmit your voting instructions up until 11:59 P.M. Eastern Time on May 14, 2008. Have your proxy
card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your
proxy card and return it in the postage-paid envelope we have provided or return it to Macys,
Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR
BLACK INK AS FOLLOWS: MACYS5 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. MACYS, INC. For Withhold For All To withhold
authority to vote for any individual All All Except nominee(s), mark For All Except and write the
THE BOARD OF DIRECTORS RECOMMEND A VOTE FOR number(s) of the nominee(s) on the line below. ITEMS
1 AND 2. Vote on Directors 0 0 0 1. ELECTION OF DIRECTORS Nominees: 01) Stephen F. Bollenbach 05)
Terry J. Lundgren 09) Karl M. von der Heyden 02) Deirdre P. Connelly 06) Joseph Neubauer 10) Craig
E. Weatherup 03) Meyer Feldberg 07) Joseph A. Pichler 11) Marna C. Whittington 04) Sara Levinson
08) Joyce M. Roché For Against Abstain Vote on Proposal 2. To ratify the appointment of KPMG LLP as
Macys independent registered public accounting firm for the fiscal year ending January 31, 2009. 0
0 0 3. In their discretion, upon such other matters that may properly come before the meeting or
any adjournment or adjournments thereof. The shares represented by this proxy when properly
executed will be voted in the manner directed herein by the undersigned Stockholder(s). If no
direction is made, this proxy will be voted FOR Items 1 and 2. If any other matters properly come
before the meeting, the person(s) named in this proxy will vote in their discretion. For purposes
of the 2008 Annual Meeting, proxies will be held in confidence (subject to certain exceptions as
set forth in the Proxy Statement) unless the undersigned checks the box below and provides comments
where indicated on the reverse side. For address changes and/or comments, please check this box 0
and write them on the back where indicated. Please sign your name exactly as it appears hereon.
When signing as attorney, executor, administrator, trustee or guardian, please add your
title as such. When signing as joint tenants, all parties in the joint tenancy must sign. If a
signer is a corporation, please sign in full corporate name by duly authorized officer. Signature
[PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date |
Important Notice Regarding Internet Availability of Proxy Materials for the Annual Meeting: The
Annual Report, Form 10-K and Proxy Statement are available at www.proxyvote.com. MACYS, INC. To:
The Bank of New York, as Trustee for The May Department Stores Company Profit Sharing Plan. ANNUAL
MEETING OF STOCKHOLDERS May 16, 2008 I acknowledge receipt of the Letter to Stockholders, the
Notice of Annual Meeting of Stockholders of Macys, Inc. to be held on May 16, 2008, and the
related Proxy Instructions. As to my proportional interest in any stock of Macys, Inc. registered
in your name, you are directed as indicated on the reverse side as to the matters listed in the
form of Proxy solicited by the Board of Directors of Macys. I understand that if I sign this
instruction card on the other side without otherwise indicating my voting instructions, it will be
understood that I wish my proportional interest in the shares to be voted by you in accordance with
the recommendations of the Board of Directors of Macys as to Items 1 and 2. If any such stock is
registered in the name of your nominee, the authority and directions herein shall extend to such
nominee. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE STOCKHOLDER(S). IF
NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES FOR THE
BOARD OF DIRECTORS LISTED IN ITEM 1 ON THE REVERSE SIDE AND FOR ITEM 2. PLEASE MARK, SIGN, DATE
AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE Address Changes/Comments:
___(If you noted any Address Changes/Comments
above, please mark corresponding box on the reverse side.) CONTINUED AND TO BE SIGNED ON REVERSE
SIDE |