COSTCO WHOLESALE CORP /NEW COST

55% shingled-prose overlap between the two filings.

2024: 26,448 chars · 2025: 25,206 chars

• Pay Ratio (Item 402(u)):47% overlap (2,701 → 2,317 chars)
• Say-on-Pay proposal:29% overlap (20,307 → 18,434 chars)

• changedFollowing is a discussion and analysis of our compensation programs as they apply to our Chief Executive Officer, Chief Financial Officer, andthe three other most highly compensated individuals who served as executive officers in fiscal 2025, 2024and one former executive officer who would have been one of our three other most highly compensated formerChiefexecutive officers if he had still been serving as an officer at the end of fiscal 2025. andChiefFinancialOfficers.
• newVachris, Chief Executive Officer; Gary Millerchip, Executive Vice President, Chief Financial Officer; Russ D.
• changedMiller, Senior Executive Vice President, Chief Operating Officer - Warehouse Operations, U.S. and Mexico; Pierre Riel, Executive Vice President, Chief Operating Officer - International Division; andJavier Polit, Executive Vice President, Chief Information and Digital Officer; and Richard Galanti, former Executive Vice President. Officer.
• changedThe Company believes it has been very successful in attracting and retaining quality employees and employees,generallyachieving low turnover in our executive, staff and warehouse management ranks.
• changedAt the 2025 2024Annual Meeting, the advisory shareholder vote on executive compensation was 94.70% 94.55%in favor.
• newCompensation levels approved by the Committee for the Named Executive Officers for fiscal 2025 did not materially change from those approved for the prior year.
• newDiscussions by certain directors and management with a number of shareholders since the 2025 Annual Meeting have not revealed significant concerns about the structure or operation of the Company's compensation programs.
• changedDuring fiscal 2025, 2024,the Committee consisted of Mr. Stanton (chair), and Mmes.
• changedThe Committee did not reevaluate for fiscal thisyear 2025 whether there is an optimal mix of equity, salary, bonus and other compensation components for each executive officer.
• changedAll named executive officers received performance-based RSU grants for fiscal 2025. 2024,exceptforMr.Jelinek,whoreceivedtime-basedRSUs.
• changedFor fiscal 2025, the Committee believes that maintaining cash bonuses at or near inthe current proportion is consistent with preferring long-term equity incentives as being in the greater interest of the Company and its shareholders.
• changedApproximately 8,000 Over7,000employees were eligible for cash bonuses for fiscal 2025. 2024.
• changedFor fiscal 2025, 2024,the Committee primarily considered executive compensation data obtained from proxy statements for the following peer companies: Walmart Inc., The Home Depot, Inc., Lowe’s Companies, Inc., The TJX Companies, Inc., Target Corporation, The Kroger Company, Best Buy Inc., BJ's Wholesale Club Holdings, Inc., CVS Health Corporation, Ross Stores Inc., and Wesfarmers Ltd. The peer companies were selected because they are recognized as successful retailers and two of them operate membership warehouse clubs.
• changedThe Committee did not use the comparable company data to set mid-points or other specific quantitative comparisons of executive compensation; it used them only for general reference.
• newRSU grants to executive officers are generally performance-based, with performance-vesting over a one-year period, time-vesting over
• newup to five years, and vesting for long service.
• changedExcept as noted below, all officers and employees who received receiveRSU grants in fiscal 2025 and prior years were eligible to receive accelerated vesting once they have achieved long service with the Company (33% vesting credited on the first anniversary of the date of grant after 25 years of service, 66% vesting after 30 years of service, and 100% vesting after 35 years of service, with any remainder vesting ratably over the remaining vesting period).
• changedMr.Jelinek'sawardsandMr. Vachris's fiscal 2025 award is 2024awardsarenot subject to accelerated vesting prior to termination for long service and instead vests vestunder the five-year vesting schedule.
• newThe performance-based awards granted to Messrs.
• changedTheperformance-basedawardsgrantedtoMr.Millerchip and Mr.Polit in fiscal 2025 2024vested one-fifth on October 22, 2025, 2024and will vest one-fifth on October 22, in each of the ensuing four years.
• changedFor awards vested on October 22, 2025, 2023,all other Named Executive Officers received 100% long-service vesting.
• newIn May 2025, the Compensation Committee approved changes to the vesting schedule applicable only to future RSU grants to ensure continued quality and competitiveness of our compensation program.
• newThe changed vesting schedule will apply only to grants beginning in October 2025 and does not affect previously granted awards or the compensation of the named executive officers disclosed in this proxy statement.
• newExecutive officers, along with all other grantees, had the option to make a one-time election to remain under the five-year vesting schedule with acceleration for long service or to change to a three-year vesting schedule with no such acceleration.
• newAll executive officers elected to remain under the five-year vesting schedule with acceleration, except for Messrs.
• newMillerchip and Polit, who elected to change to a three-year vesting schedule.
• changedThe criteria for the fiscal 2025 2024performance-based grants were (versus fiscal 2024) 2023)a 3% increase in net sales or a 2% 7%increase in pre-tax income (both adjusted for changes in foreign currencies). currenciesandnormalizedforonelessweekinfiscal2024).
• newFor fiscal 2025, RSU grants were made on October 22, 2024, and the performance criteria for the grants were established in November 2024.
• changedAll grants in fiscal 2025 2024were made under the Company’s 2019 Incentive Plan, approved by the shareholders in January 2019.
• changedThe plan provides that the first $10,000 of an employee’s contributions may be matched 50% by the Company, subject to certain limitations.
• changed2025 2024Compensation of the Chief Executive Officer
• changedNear the end of calendar 2024, 2023,the Committee approved a written employment contract with Mr. Vachris, related to service during calendar 2025, 2024,providing for a salary of $1,200,000, an increase of 4% over the previous fiscal year. $1,150,000.
• newFor fiscal 2025, the Committee granted Mr. Vachris 13,834 performance-based RSUs, which represented an increase of 19% over the prior year, based on the closing share price at the time of grant.
• newThe Committee determined the increase to be warranted based on Mr. Vachris' performance and the level of CEO compensation at peer companies.
• changedFor fiscal 2025, the bonus was determined by the Committee in November 2024: 2023:(i) $250,000 $220,000of bonus eligibility was determined by the Company's attainment of its pre-tax income goal, which was exceeded in fiscal 2025 2024(the goal was $10.73 $9.6billion, on a generally accepted accounting principles basis; actual pre-tax income, adjusted for changes in foreign currencies based on budgeted rates, as provided for in the plan, was $10.87 $9.8billion); (ii) $250,000 $220,000of bonus eligibility was determined based on net sales (the goal was $271.02 $253.8billion; actual net sales, adjusted for changes in foreign currencies based on budgeted rates, as provided for in the plan, were $271.78 billion); $250.4billion,achieving98.7%ofthetarget);and (iii) $100,000 $93,333of bonus eligibility was determined by environmental and social objectives for achievement of quantitative performance metrics, including environmental metrics(includingmetricsconcerningdiversity,equityand human capital metrics. inclusion,resourceconsumption,andotherenvironmental-relatedareas).
• changedFor fiscal 2025, 2024,the pre-tax income component of the bonus earned was $250,000, $231,000,based on the Company's achieving 101.3% 102%of the pre-tax profit target.
• changedThe sales component of the bonus was $250,000, $110,000,based on the Company's achieving 100.3% 98.7%of the sales target.
• changedThe quantitative environmental and social targets were met, entitling Mr. Vachris to $100,000. $93,333.
• changedApart from the change-in-control provision in the Company’s equity plan applicable to all grantees and in the deferred compensation plan applicable to all participants (described below under “Potential Payments Upon Termination or Change-in-Control”), none of Mr. Vachris or any other employee has or had any change-in-control arrangement with the Company. Messrs.
• changed2025 2024Compensation of Other Named Executive Officers
• changedThe most significant component of compensation in fiscal 2025 2024was performance-based RSUs.
• newMillerchip, Galanti, Miller, Riel, and Polit were 6,268, 5,937, 4,654, 4,654, and 4,219.
• newGalanti, Miller, Riel, and Polit, based on the closing share price at the time of the grant.
• newMr. Millerchip received an award in the previous year for five months of service with the Company and he received a full award this year.
• newWhile this represents a 100% increase, if he received a full award last year, the increase would have been 3%, consistent with all others.
• changedThe amounts awarded were based on the recommendations of Mr. Jelinek(Mr.Vachris inthecaseofMr.Millerchip'sawards)and approved by the Committee before the grants.
• changedSalaries for other Named Executive Officers MillerchipandPolit,were based upon the recommendation of Mr. Vachris, Jelinek,who focused on the amount of increase deserved over the prior year’s salary level.
• changedBase salary levels for these officers increased between 2% and 5% 4%over the previous fiscal year.
• changedOther Named Executive Officers received cash bonuses of $200,000. $164,000,withMessrs.
• changedThe potential payment attributable to each of these performance goals was from zero up to 120% of theawardtargetamount,basedonthe levelofachievement.
• newaward target amount, based on the level of achievement.
• changedUp to $40,000 in potential related to environmental and social objectives: $24,000 relating to achievement of quantitative performance metrics, including environmental metrics(includingmetricsconcerningdiversity,equityand human capital metrics, inclusion,resourceconsumption,andotherenvironmental-relatedareas)on an all or nothing basis depending upon whether a majority of the quantitative metrics were satisfied; and up to $16,000 based on discretionary assessment by the Chief Executive Officer of the officer's environmental and social achievements (including, without limitation, progress in controlling emissions).
• changedFor fiscal 2025, 2024,the pre-tax income component of the bonus earned was $80,000, $84,000,based on the Company's achieving 101.3% 102%of the pre-tax profit target.
• changedThe net sales component of the bonus earned was $80,000, $40,000,based on the Company's achieving 100.3% 98.7%of the net sales target.
• newMr. Polit also received a signing bonus of $3 million, earned on October 22, 2024, with remaining amounts of $2.2 million, $1.5 million, and $740,000 payable on October 22 in three subsequent years, contingent on his continued employment.
• changedAll executive officers were in compliance at the end of calendar 2024. 2023.
• newThe prohibition on transactions involving hedging includes any
• changedTheprohibitionontransactionsinvolvinghedgingincludesanyinstrument or transaction, including put options and forward-sale contracts, through which an individual offsets or reduces exposure to the risk of price fluctuations in a corresponding equity security.
• changedA copy of the policy is wasfiled as Exhibit 19.1 to our Annual Report on Form 10-K. 10-KforthefiscalyearendedSeptember1,2024.
• changedBased on the review and discussions with management, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2025, September1,2024,for filing with the SEC.