Promoting Sound Governance
Tractor Supply’s Board of Directors believes that good corporate governance is important to ensure that the Company is managed for the long-term benefit of our stakeholders. We continually review our corporate governance policies and practices and compare them to the best practices of other publicly traded companies. We also comply with all applicable regulations of the Securities and Exchange Commission and the Listing Standards of Nasdaq.
Our Board of Directors has adopted Corporate Governance Guidelines, which outline the composition, operations and responsibilities of the Board of Directors. Throughout the year, our management team updates the Board on the business and potential risks.
We discuss the Board’s oversight of risk in our 2019 Proxy Statement. We also include our Corporate Governance Guidelines and other governance documents on the Investor Relations – Corporate Governance section of our website.
The Board includes three committees comprised solely of independent directors: Audit Committee, Compensation Committee and Corporate Governance/Nominating Committee. We have an independent Chairman of the Board who approves Board meeting agendas and leads meetings of the Board. Each of our directors is elected annually by a majority of our shareholders and, other than our CEO, all meet our independence criteria and that of Nasdaq. As of March 2019, 90% of Tractor Supply’s Board of Directors is classified as independent.
The Compensation Committee has incorporated market-leading pay-for-performance features into our executive compensation programs. Our compensation program includes:
- robust stock ownership guidelines,
- targets for incentive awards that are objective and tied to the Company’s performance, and
- performance-based restricted stock units contingent on the achievement of key performance metrics.
Diversity and inclusion are values ingrained in our culture and essential to our business. We believe that a board compromised of directors with diverse backgrounds, unique skill sets and experiences and individual perspectives improves the dialog and decision-making process which contributes to overall Board effectiveness.
We believe the Board benefits from a mix of new directors who bring fresh perspectives and longer-serving directors who bring valuable experience, continuity and a deep understanding of the Company. Three of our Board members have joined since November of 2017. The average tenure of our independent directors is 6.9, with an average age of 61.
Tractor Supply has been recognized on the Honor Roll of 2020 Women on Boards for our Board’s gender diversity of 20% or more for seven consecutive years. As of March 2019, 30% of Tractor Supply’s Board of Directors is female, and 20% is racially diverse.
The Board, through the Corporate Governance Committee, administers a robust annual performance review process that enables directors to provide assessment of the performance of the full Board of Directors and each committee, along with a peer assessment in which directors are assessed individually. The process includes a written evaluation as well as one-on-one interviews by our Chairman.
The director selection process is focused on finding the right balance of skills and experience to govern the Company effectively. We believe the combination of the skills and qualifications shown below demonstrates how our Board is well positioned to provide effective oversight and strategic direction to our management.
Note: Excludes Pete Bewley, who is not standing for reelection in 2019.