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Lowes Executive Compensation 2011

RESOLVED:  That the shareholders of Lowe's Companies, Inc. ("Lowe's" or "Company") request the Board's Compensation Committee, when setting senior executive compensation, include sustainability as one of the performance measures for senior executives under the Company's annual and/or long-term incentive plans. Sustainability is defined as how environmental, social and financial considerations are integrated into corporate strategy over the long term.
 
SUPPORTING STATEMENT
 
We believe that the long-term interests of shareholders, as well as other important constituents, is (sic) best served by companies that operate their businesses in a sustainable manner focused on long-term value creation. As the recent financial crisis demonstrates, those boards of directors and management that operate their companies with integrity and a focus on the long term are much more likely to prosper than ones that are dominated by a short-term focus. The best means of demonstrating a company's commitment to the concept of sustainability is through incorporating it as a performance measure in the Company's annual and/or long-term incentive plans.
 
We note that the Company has affirmed its commitment to the concept of sustainability. Lowe's website includes a discussion of "Lowe's Policy on Sustainability." In it the Company states:
 
Sustainability involves using resources more efficiently and in ways which benefit the environment, customers, business and local communities. Operating our business more sustainably means considering the environmental impacts of operations in Lowe's stores, offices and supply chain and considering the lifecycle impact of the products and services used and sold.
 
To operate more sustainably, Lowe's will strive to:
-Provide customers with environmentally-responsible products, packaging and services at everyday low prices;
-Educate and engage employees, customers and others on the importance of conserving resources, reducing waste and recycling;
-Use resources — energy, fuel, water and materials — more efficiently and responsibly to minimize our environmental footprint;
-Establish sustainability goals and objectives;
-Review and communicate progress made toward achieving established goals and objectives; and
-Engage on public policy issues related to sustainability.
 
While these words are laudable, incorporating them into the Company's senior executive compensation program would give them real impact. Yet, the Compensation Discussion and Analysis section of Lowe's 2010 Proxy Statement contains no discussion of sustainability. Neither the Company's annual incentive plan nor its long-term incentive plan utilizes any performance measures related to sustainability. We believe that this represents a serious shortcoming.
 
Other companies have added sustainability to the metrics that they use when determining executive compensation. British utility company National Grid announced last year it would partly base executive compensation on meeting targets for reducing carbon emissions. In addition, Xcel Energy in its 2009 proxy statement discloses that certain annual incentive payments are dependent on green house (sic) gas emission reductions alongside the weight given to meeting earnings per share targets. Also Intel Corporation calculates every employees (sic) annual bonus based on the firms (sic) performance on measures that include energy efficiency, completion of renewable energy and clean energy projects, and the company's reputation for environmental leadership.