Form PREC14A RITE AID CORP Filed by: RITE AID CORP

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION​

Washington, D.C. 20549

SCHEDULE 14A

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

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Soliciting Material under §240.14a-12

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RITE AID CORPORATION​

(Name of Registrant as Specified In Its Charter)​

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)​

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Fee paid previously with preliminary materials

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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

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LETTER FROM OUR INDEPENDENT BOARD CHAIR

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Continued the momentum of RxEvolution, the Company’s strategy launched in March 2020, to build a full-service pharmacy company with the existing assets of Rite Aid, Elixir, and Health Dialog. Through strategic integration of these assets, we provide high quality pharmacy services across the country. We look to further enhance performance through these assets in fiscal year 2023.

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Recognized the need to deepen our ESG efforts, including those relating to the management of toxic chemicals and the redevelopment and repositioning of the Company’s own brands program focused on “clean ingredients.” The Company also articulated its commitment to diversity, equity, and inclusion and clearly outlined its values. You can view the Commitment Statement at https://www.riteaid.com/about-us/diversity-equity-inclusion.

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In terms of business performance, the Board was pleased that management achieved the following financial metrics in fiscal year 2022:

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Adjusted EDITDA1 of $506 million, a $68 million or 16% improvement over last year.

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Revenues of $24.56 billion, compared to $24.04 billion for fiscal year 2021.

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At the same time, we understand that the Company faces challenges in fiscal year 2023. In particular, to offset the anticipated downturn in COVID-19 testing and vaccinations, the Company is focused on increasing front end sales, driving pharmacy services and growing Elixir’s business. In addition, we must continue to reduce expenses in line with revenues. By frequently engaging with senior management and compliance associates, the board monitors efforts to achieve this performance while also overseeing risks faced by the Company and the steps to mitigate those risks.

In closing, we know that the COVID-19 pandemic shined a spotlight on the work of pharmacy companies and the dedication of our associates, including our pharmacists. As we advance, the Board and management are committed to improving financial results over time while we help our customers thrive.

We hope you and your families are safe and well. Thank you for your investment in Rite Aid.

Refer to the section titled “Cautionary Statement Regarding Forward-Looking Statements” for a discussion of risks and uncertainties that could cause actual results to differ materially from those projected.

1

See Appendix A for a reconciliation of our Adjusted EBITDA, which is a non-GAAP measure, to net income under GAAP.

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LETTER FROM OUR CHIEF EXECUTIVE OFFICER

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This plan has been validated and proven to drive our enterprise forward. We have seen the immense impact pharmacists had during COVID, providing much needed products and administering testing and life-saving vaccines to the public. They also continued to serve as care connectors and whole health advocates for customers and communities. In fiscal year 2022, our pharmacists administered more than 3.6 million COVID-19 tests and over 14.3 million vaccines, supported thousands of vaccine clinics and engaged customers daily to help with their everyday health needs. We met customers where and how they needed us through rebranded and refreshed retail stores, evolved merchandise focused on whole health, and improved omni-channel presence with an overhauled e-commerce site and app, at-home delivery platforms and buy-online-pick-up-in-store options. A new Elixir leadership team is driving their turnaround through more competitive pricing, engaging clients and their consultants with new go-to-market plans and a repositioned Health Dialog. Our Elixir account and sales teams are gaining momentum, and we are executing more efficiently by consolidating functions. And the market is noticing—we have added 34,000 individuals covered by Elixir’s PBM services since January 1, 2022, with many more in the pipeline. And we just won the renewal of our largest health plan client in a very competitive bidding process.

At the same time, we kept our focus on growing our business, reducing costs and improving our leverage ratio. This included ending the year with over $1.9 billion in liquidity and a leverage ratio of 5.4, paying off the remaining $91 million of our 6.125% 2023 bonds using availability under our revolving credit facility, achieving an upgrade to our corporate credit rating from both Moody’s and Standard and Poor’s, and growing Adjusted EBITDA by $68 million1 (16% over the prior year).

We are proud of what we have achieved together since our lives were upended due to COVID-19. In fact, in many ways the pandemic accelerated our strategy and purpose. Now, we are eager to move forward. The new challenges and opportunities to serve our customers speak directly to our strengths and the unique value we bring—helping people achieve whole health for life.

As we turn the page into fiscal year 2023, we are focused on the continued transformation of Rite Aid into a leading full-service pharmacy company. We have a deep bench of assets to address the trillion-dollar pharmacy market, which is growing by $40 billion per year according to IQVIA and iIBISWorld, healthcare analytics and industry market research companies. And we will continue to address the significant medication access and cost barriers faced by many Americans. We know that one in seven Americans lives more than five miles away from a pharmacy and 29% of Americans failed to take their medications as prescribed because of the cost. We believe Rite Aid will be a key part of the solution to eliminate these boundaries.

1

See Appendix A for a reconciliation of our Adjusted EBITDA, which is a non-GAAP measure, to net income under GAAP.

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Underpinning our strategy is our mission to be the trusted, everyday care connector that lowers health care costs through better coordination, stronger engagement and personalized services to help our customers and communities achieve whole health for life. We have made significant progress in these areas. For example, our medication therapy management program has led to an 8% prevention of hospital readmissions, 8% prevention in ER visits and a 12% prevention of additional physician visits. Our team’s strong customer engagement helps people manage pain, resulting in a 25% morphine milligram equivalent dose reduction per day for enrolled members, which has been shown to reduce the risk for opioid addiction. These are just a few ways we are making a meaningful difference in people’s lives, and we are focused on doing much more.

We are eager to share more on our plan with you and we invite you to attend our 2022 Annual Meeting of Stockholders. The meeting will be held at 3 p.m. eastern daylight time on July 27, 2022, and once again will be a virtual meeting to make the meeting more accessible to all of our stockholders. You can attend the meeting via the internet at (www.virtualshareholdermeeting.com/RAD2022) by using the 16-digit control number, which appears on your Notice of Internet Availability of Proxy Materials or, if you received a paper copy of the proxy materials, your WHITE proxy card (printed in the box and marked by the arrow) or the instructions that accompanied your proxy materials. You will have the ability to submit questions during the meeting via the meeting website. At the meeting, stockholders will vote on the proposals set forth in the Notice of Annual Meeting and the accompanying proxy statement.

On behalf of our team, we look forward to continuing to support the needs of our customers while driving growth and improving performance and stockholder value. Thank you for your investment in Rite Aid.

June [•], 2022

Refer to the section titled “Cautionary Statement Regarding Forward-Looking Statements” for a discussion of risks and uncertainties that could cause actual results to differ materially from those projected.

In addition, we will transact any business properly presented at the meeting, including any adjournment or postponement thereof.

Please note that a stockholder has notified us of his intention to nominate himself for election as a director at the Annual Meeting. See page 88 for additional information regarding this potential stockholder nomination.

For information regarding how to access the list of stockholders entitled to vote at the meeting, see “Information About the Annual Meeting and Voting—Is there a list of registered stockholders entitled to vote at the Annual Meeting?” in the proxy statement.

 

Have your WHITE proxy card or voting instruction form in hand, with your individual control number, and follow the instructions.

 

​	1	​	​	PROXY STATEMENT SUMMARY	​
​	2	​	​	Business Strategy and Performance in FY 2022	​
​	4	​	​	Stockholder Engagement Efforts	​
​	5	​	​	Board of Directors	​
​	6	​	​	Board and Governance Highlights	​
​	7	​	​	Executive Compensation Overview	​
​	​	​	​	Human Capital Management Efforts	​
​	​	​	​	Diversity, Equity and Inclusion Efforts	​
​	8	​	​	Environmental, Social & Governance Efforts	​
​	11	​	​	PROPOSAL 1—ELECTION OF DIRECTORS	​
​	14	​	​	Director Nominees	​
​	18	​	​	CORPORATE GOVERNANCE AND BOARD MATTERS	​
​	18	​	​	Board Leadership Structure	​
​	18	​	​	Director Independence	​
​	19	​	​	Corporate Governance Practices	​
​	19	​	​	Board Oversight of Risk Management	​
​	21	​	​	Committees of the Board of Directors	​
​	22	​	​	Audit Committee	​
​	23	​	​	Compensation Committee	​
​	23	​	​	Compensation Committee Interlocks and Insider Participation	​
​	24	​	​	Nominating and Governance Committee	​
​	24	​	​	Executive Committee	​
​	24	​	​	Board Meeting Attendance	​
​	25	​	​	Director Nominations	​
​	26	​	​	Executive Sessions of Non-Management Directors	​
​	26	​	​	Communications with the Board of Directors	​
​	26	​	​	Environmental, Social & Governance Matters	​
​	​	​	​	Opioids and Our Communities	​
​	27	​	​	Corporate Governance Materials	​
​	27	​	​	Certain Relationships and Related Transactions	​
​	28	​	​	Directors’ Compensation	​
​	31	​	​	PROPOSAL 2—RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	​
​	31	​	​	Auditor Fees	​
​	31	​	​	Audit Committee Report	​
​	33	​	​	PROPOSAL 3—ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS	​
​	34	​	​	EXECUTIVE COMPENSATION	​
​	34	​	​	Compensation Discussion and Analysis	​
​	58	​	​	Compensation Committee Report	​

​	​	​	​	Executive Compensation Tables	​
​	59	​	​	Summary Compensation Table	​
​	61	​	​	Grants of Plan-Based Awards	​
​	62	​	​	Executive Employment Agreements	​
​	63	​	​	Outstanding Equity Awards at Fiscal Year 2022 Year-End	​
​	64	​	​	Option Exercises and Stock Vested Table for Fiscal Year 2022	​
​	64	​	​	Pension; Nonqualified Deferred Compensation	​
​	64	​	​	Potential Payments Upon Termination or Change in Control	​
​	69	​	​	Pay Ratio Disclosure	​
​	70	​	​	PROPOSAL 4—APPROVAL OF AN AMENDMENT TO THE RITE AID CORPORATION AMENDED AND RESTATED 2020 OMNIBUS EQUITY INCENTIVE PLAN	​
​	81	​	​	PROPOSAL 5—APPROVAL OF THE AMENDMENTS TO THE RITE AID CORPORATION AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO ELIMINATE SUPERMAJORITY VOTING PROVISIONS	​
​	82	​	​	PROPOSAL 6—STOCKHOLDER PROPOSAL TO ELIMINATE SUPERMAJORITY VOTING PROVISIONS	​
​	84	​	​	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	​
​	86	​	​	INFORMATION ABOUT THE ANNUAL MEETING AND VOTING	​
​	86	​	​	Questions and Answers	​
​	94	​	​	Important Notice Regarding Delivery of Stockholder Documents	​
​	95	​	​	OTHER INFORMATION	​
​	95	​	​	Stockholder Proposals for the 2023 Annual Meeting	​
​	96	​	​	Incorporation by Reference	​
​	97	​	​	Other Matters	​
​	97	​	​	Annual Report	​
​	98	​	​	Cautionary Statement Regarding Forward-Looking Statements	​
​	A-1	​	​	APPENDIX A—NON-GAAP FINANCIAL MEASURES	​
​	B-1	​	​	APPENDIX B—PROPOSED AMENDMENT TO THE RITE AID CORPORATION AMENDED AND RESTATED 2020 OMNIBUS EQUITY INCENTIVE PLAN	​
​	C-1	​	​	APPENDIX C—PROPOSED AMENDMENTS TO THE RITE AID CORPORATION AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO ELIMINATE SUPERMAJORITY VOTING PROVISIONS	​
​	D-1	​	​	APPENDIX D—SUPPLEMENTAL INFORMATION REGARDING PARTICIPANTS	​

 

This Proxy Statement Summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information you should consider, so please read the entire proxy statement carefully before voting. References to “Rite Aid,” “Rite Aid Corporation,” the “Company,” “we,” “us,” or “our” in this proxy statement and the accompanying notice and letters to stockholders refer to Rite Aid Corporation and/or its affiliates. Rite Aid Corporation, a Delaware corporation, owns multiple subsidiary companies which operate Rite Aid stores and pharmacies and other affiliated companies. The term “affiliates” means direct and indirect subsidiaries of Rite Aid Corporation and partnerships and joint ventures in which such subsidiaries are partners. References herein to “associates” refer to employees of our affiliates.

This proxy statement is being furnished to you by the Board of Directors (the “Board” or “Board of Directors”) of Rite Aid Corporation to solicit your proxy to vote your shares at our 2022 Annual Meeting of Stockholders (the “Annual Meeting”). The Annual Meeting will be held on July 27, 2022 at 3 p.m., Eastern Daylight Time, by live audio webcast at www.virtualshareholdermeeting.com/RAD2022.

The following proposals will be on the agenda for the Annual Meeting:

Please note that a stockholder has notified us of his intention to nominate himself for election as a director at the Annual Meeting. See page 88 for additional information regarding this potential stockholder nomination.

 

RITE AID CORPORATION   2022 Proxy Statement | 1

Over the last two years our team has executed this strategy in ways that built trust in the communities we serve. It was the right plan for the right time to help support our customers and associates through the COVID-19 pandemic. It is now time to turn the page to a post-COVID environment and address existing and emerging marketplace opportunities and community needs as a full-service pharmacy company. Our full suite of assets positions us for growth in this trillion-dollar market.

We plan to leverage these assets and drive growth in three ways:

Our strategy is designed to leverage our retail footprint, the power of technology and the convergence of health care channels to provide holistic health solutions, increase medication adherence and drive down costs for customers and consumers alike. Pharmacies have been long recognized for their importance as the “last mile” of health care delivery. Our customers engage with our pharmacists more than any other health care provider. Our unique approach leverages pharmacists as customer health advocates, delivering on our promise to serve our customers on the last mile of their journey to overall health and wellness.

 

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We endeavor to leverage our pharmacists, in store, telephonically and via chat/video to remove barriers to treatment plan adherence, reduce cost, and create new, integrated clinical models of care. Our approach is a modern, technology-driven ecosystem that will bring distinct areas of pharmacy into a single, coordinated system of care in order to reduce drug cost and reduce the overall healthcare costs of our customers. As the trusted pharmacy advisor to our customers, we see healthplans, health systems and employers increasing leveraging our pharmacists to conduct clinical interventions to help them achieve these results.

In the face of the COVID-19 pandemic, Rite Aid has been on the front lines of health care delivery in many of the hardest-hit cities in America. Our response to this global crisis is closely tied to our corporate social responsibility efforts. We were proud to participate in the White House COVID-19 Response Working Group and to significantly expand the nation’s self-swab testing capacity. We were also pleased to join the Federal Retail Pharmacy Program to provide coronavirus vaccines. In fiscal year 2022, Rite Aid delivered millions of COVID-19 vaccines and tests, and held thousands of immunization clinics, including many clinics in underserved areas.

Throughout the pandemic, our associates proved their ability to adapt to new and changing government regulations and recommendations from The Centers for Disease Control and Prevention, all while providing needed medications, essential supplies, and COVID-19 information to the communities that we serve. We are incredibly proud of their efforts during this time.

2

As of February 26, 2022 (figures are rounded).

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We were pleased to have increased stockholder support for our say on pay resolution at our 2021 Annual Meeting of Stockholders.

We believe this support was in part based on our active outreach plan to stockholders to understand stockholder perspectives on compensation, which we continued throughout 2021 and early 2022. Our engagement with stockholders occurs on a continuous basis, with calls and meetings happening throughout the year. Additionally, in fiscal year 2022 we proactively offered Company-initiated meetings to our largest stockholders representing approximately 50% of our outstanding shares. These meetings included an offer to speak with the Board Chairman, the Chair of our Compensation Committee, the CEO, and the CFO. Our Compensation Committee considers investor perspectives when making decisions on executive compensation and DEI initiatives. We intend to continue this broad stockholder engagement this year.

We regularly seek the perspectives of our stockholders on issues important to them. Through our quarterly financial performance webcasts, analyst conferences, investor meetings and calls we obtain and share stockholder feedback with our Board and committees. This feedback from stockholders, including views regarding Board composition, corporate governance matters and ESG matters is extremely valuable to our Board of Directors and management.

 

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We have added 7 new directors to our Board since 2018, all of whom are either women or racially or ethnically diverse.

 

RITE AID CORPORATION   2022 Proxy Statement | 5

Please note that a stockholder has notified us of his intention to nominate himself for election as a director at the Annual Meeting. See page 88 for additional information regarding this potential stockholder nomination.

 

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Our executive compensation program is based on a pay-for-performance philosophy and is designed to accomplish the following goals:

 

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In fiscal year 2022, approximately 89% of the CEO’s total target compensation and 76% of the average total target compensation of all other NEOs was subject to the achievement of strategic and operational company goals.

Rite Aid is committed to integrating Environmental, Social, and Governance (ESG) initiatives into our operations, not only to create value for our stockholders, customers, and associates, but also because we are deeply invested in our communities, and our customers want to support a company that supports their safety and our environment.

As part of our annual ESG report, last year we identified our key opportunity areas and defined our four ESG pillars, each with a corresponding high-level goal: Thriving Planet, Thriving Business, Thriving Workplace and Thriving Community. In fiscal year 2022, we conducted comprehensive peer benchmarking exercises, current state assessments and gap analyses in key areas such as carbon and waste reduction, responsible sourcing and human capital management. We know that transformative progress starts by measuring performance, and we are laying the groundwork to develop our long term ESG goals and Key Performance Indicators (KPIs), such as emissions reduction commitments. Below are several progress updates from fiscal year 2022.

Climate Data Assurance: As part of our annual climate change questionnaire submission to the Carbon Disclosure Project (CDP) in fiscal year 2022, we engaged with an external partner to have our scope 1 and 2 emissions verified. In addition to providing assurances around this data, this exercise also helped us set a baseline as we consider setting a carbon reduction goal in the future.

Some of our quantitative fiscal year 2022 highlights include:

 

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conducted a pay equity study through a consultant that produced favorable results;

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conducting annual engagement surveys on topics such as career development, well-being, compensation, benefits, recognition, leader communications, and opportunities specific to diversity, equity and inclusion efforts, in which more than 70% of our associates have participated;

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expanding our efforts to attract talent during a national labor shortage with sign-on bonuses, pay adjustments in hard to staff areas, and referral bonuses;

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becoming a remote-first employer for our corporate associates, allowing us to expand our talent pool and allow our corporate associates more flexibility to balance their work and family priorities;

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developing success profiles for our associates to refine skills needed today and build capabilities for the future;

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obtaining certification as an Accredited Provider of Continuing Pharmacy Education, which allows us to offer courses that count toward the continuing education licensing requirements of our pharmacists;

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offering an accredited pharmacy technician certification program;

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offering compensation and benefit programs to support, recognize and reward performance of our associates (including annual bonuses, 401(k) plans, health care benefits, paid time off, life and disability coverage, merchandise discounts, and many other services and programs);

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offering associate wellness programs and tools for whole health in areas such as mental health, disease management, and financial wellness; and

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developing an associate recognition program that incorporates financial incentives to celebrate the achievements of our teams and create a community experience for our workforce.

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Diversity, Equity & Inclusion Efforts: We continue to progress with our Diversity, Equity & Inclusion (DEI) transformation as we enable our RxEvolution. We know that to build change that is meaningful and lasting, we must engage the unique perspectives, experiences and approaches that only come from a diverse workforce. We believe that an inclusive and welcoming workplace is not only desirable but essential, and we are committed to building a workplace in which every associate can thrive. To emphasize this, we are being intentional with our DEI Commitment Statement, which aligns with our values, so that all of our associates know what behaviors we expect them to demonstrate. And we hold ourselves accountable to our customers, stockholders and other key stakeholders so that they know our commitment and see these behaviors in action every day.

Our new DEI strategy roadmap will help us advance further in our DEI journey. It includes the integration of DEI into human resource policies as well as business processes to create measurable and sustainable improvements. For example, we implemented our Heritage and History Month programs to celebrate DEI throughout the year to cultivate a more inclusive work environment. We are also placing a strong emphasis on talent acquisition, development and management processes to grow a pipeline for future leaders with unique perspectives, experiences, and approaches.

Rite Aid’s purpose is to help the customers and communities we serve achieve whole health for life. To live our purpose, we are building a workforce that is inclusive and reflects the diverse customers and communities we serve. We have made a concerted effort with federal, state, and local governments to provide COVID-19 vaccines in medically underserved communities. A key component of our merchandise strategy is to align our assortment to the needs and desires of today’s consumers and the communities we serve. Accordingly, we have been increasing the representation of products and brands that have cleaner and healthier ingredients, are ethos-driven, earth friendly, and more inclusive.

As of December 31, 2021, 68% of associates self-reported as female. In addition, associates self-reported their race/ethnicity as: White 54%; Hispanic 15%; Black 14%; Asian 12%; and Other 5%. We are proud to have a Board with 87% overall diversity, which is composed of 50% gender diversity and 33% ethnic/racial diversity.

 

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Management of Toxic Chemicals: Last year, we reported 99% of our in scope own brand assortment were free of our identified 8 highest chemicals of high concern. In fiscal year 2022, we expanded our commitments around the management of toxic chemicals to enhance efforts around identifying environmental justice chemicals of concern; putting additional requirements in place for our suppliers around comprehensive ingredient disclosure and transparency; and requiring own brand food suppliers comply with our food packaging restricted substance list.

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Product Attributes Program: In fiscal year 2022, we announced a multi-year initiative to re-architect our own brands program where “clean ingredients” will not only be celebrated, but will be a core component of our positioning across brands and categories, including health, beauty, personal care, consumables, household and more. In August 2021, we launched our consumer-led product attribute program, featuring four key benefit territories: Proud Planet, Well Being, Smart Choice and Free From. Each territory supports various product attributes relevant to our customer expectations, such as “responsibly sourced”, “organic”, “paraben free”, etc. At the end of fiscal year 2022, we had 54 different product attributes listed as part the program to enhance consumer transparency, through shelf tag labels, in store signage, own brand packaging and across our marketing channels. More information can be found at: https://www.riteaid.com/better-choices. Website content is not incorporated into this proxy statement.

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Our By-Laws provide that the Board of Directors may be composed of up to 15 members, with the number to be fixed from time to time by the Board. The Board has changed the number of directors from nine members to eight, effective as of the Annual Meeting. The Board has nominated eight nominees for director at our Annual Meeting. All directors are elected annually.

The Board of Directors, based on the recommendation of the Nominating and Governance Committee, has nominated the following individuals to be elected directors at the Annual Meeting:

Each of the nominees for director to be elected at the Annual Meeting currently serves as a director of the Company. Each director elected at the Annual Meeting will hold office until the 2023 Annual Meeting of Stockholders and will serve until his or her successor is duly elected and qualified.

If any nominee at the time of election cannot serve and as a consequence another nominee is designated, then the proxies or their substitutes will have the discretion and authority to vote for such other nominee in accordance with their judgment, or the Board may reduce the size of the Board.

The following table sets forth certain information as of April 29, 2022 with respect to our director nominees.

Please note that a stockholder, Mr. Scott Klarquist, has notified us of his intention to nominate himself for election as a director at the Annual Meeting. You may receive solicitation materials from Mr. Klarquist, including a proxy statement and a proxy card seeking your proxy to vote for him as a nominee. Rite Aid is not responsible for the accuracy of any information provided by or relating to Mr. Klarquist contained in solicitation materials filed or disseminated by or on behalf of Mr. Klarquist or any other statements Mr. Klarquist or his representatives may make. The Board unanimously recommends that you do not sign or return any proxy card sent to you by or on behalf of Mr. Klarquist. See page 88 for additional information regarding this potential stockholder nomination.

 

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The Board is committed to ensuring that it is composed of a highly capable and diverse group of directors who are well-equipped to oversee the success of the business and effectively represent the interests of stockholders. The Board has significantly accelerated its efforts to change the composition of the Board over the past four years. As a result, approximately 38% of the director nominees are racially or ethnically diverse and 50% of the director nominees are women. In addition to enhancing the Board’s racial, ethnic and gender diversity, these changes bring a diversity of thought and experience to the Board. All of the nominees of the Board, other than Ms. Donigan, are independent directors.

We have added 7 new directors to our Board since 2018, all of whom are either women or racially or ethnically diverse.

In assessing Board composition and selecting and recruiting director candidates, the Board seeks to maintain an engaged, independent Board with broad experience and judgment that is committed to representing the long-term interests of our stockholders. The Nominating and Governance Committee considers a wide range of factors, including the size of the Board, the experience and expertise of existing Board members, other positions the director candidate has held or holds (including other board memberships), and the candidate’s

 

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independence. In addition, the Nominating and Governance Committee takes into account a candidate’s ability to contribute to the diversity of background and experience represented on the Board, and it reviews its effectiveness in balancing these considerations when assessing the composition of the Board.

The chart below summarizes the qualifications, attributes, skills and experiences for each of our director nominees. The fact that we do not list a particular experience or qualification for a director nominee does not mean that nominee does not possess that particular experience or qualification.

 

RITE AID CORPORATION   2022 Proxy Statement | 13

Following are the biographies for our director nominees, including information concerning the particular experience, qualifications, attributes, or skills that led the Nominating and Governance Committee and the Board to conclude that such person should serve on the Board, as well as their Committee assignments in fiscal year 2022:

 

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Please note that a stockholder, Mr. Scott Klarquist, has notified us of his intention to nominate himself for election as a director at the Annual Meeting. You may receive solicitation materials from Mr. Klarquist, including a proxy statement and a proxy card seeking your proxy to vote for him as a nominee. Rite Aid is not responsible for the accuracy of any information provided by or relating to Mr. Klarquist contained in solicitation materials filed or disseminated by or on behalf of Mr. Klarquist or any other statements Mr. Klarquist or his representatives may make. The Board unanimously recommends that you do not sign or return any proxy card sent to you by or on behalf of Mr. Klarquist. See page 88 for additional information regarding this potential stockholder nomination.

 

RITE AID CORPORATION   2022 Proxy Statement | 17

Company By-Laws provide that the Chair of the Board must be a director who is independent under the NYSE listing standards and the Company’s Corporate Governance Guidelines. The Board believes that separation of the positions of Chair of the Board and Chief Executive Officer best serves the needs of the Company and its stockholders. The Board believes that Mr. Bodaken will continue to provide excellent independent leadership of the Board in his role as Chair.

For a director to be considered independent under the NYSE corporate governance listing standards, the Board of Directors must determine that the director does not have any direct or indirect material relationship with the Company, including any of the relationships identified in the NYSE independence standards. The Board considers all relevant facts and circumstances in making its independence determinations.

As a result of this review, the Board affirmatively determined that the following directors, including each director serving on the Audit Committee, the Compensation Committee, and the Nominating and Governance Committee, satisfy the independence requirements of the NYSE listing standards:

The Board also previously determined that Kevin E. Lofton, who will serve as a director until the Annual Meeting, satisfied the independence requirements of the NYSE listing standards. In addition, the Board determined that the members of the Audit Committee satisfy the additional independence requirements for audit committee members and that the members of the Compensation Committee satisfy the additional independence requirements for compensation committee members.

As an employee of the Company, Ms. Donigan is not an independent director.

 

18 | RITE AID CORPORATION   2022 Proxy Statement

There is no family relationship between any of the nominees and executive officers of Rite Aid.

We recognize that good corporate governance is an important means of promoting the long-term interests of our stockholders, associates, customers, suppliers, and the community. The Board of Directors, including through the Nominating and Governance Committee, monitors corporate governance developments and proposed legislative, regulatory, and stock exchange corporate governance reforms.

Under the Company’s By-Laws, a nominee for director in uncontested elections of directors will be elected to the Board if the votes cast “for” such nominee’s election exceed the votes cast “against” such nominee’s election. In contested elections (as is the case for this Annual Meeting), directors will be elected by a plurality of votes cast.

Under the Company’s Corporate Governance Guidelines, a director who fails to receive the required number of votes for reelection in accordance with the By-Laws will, within five days following certification of the stockholder vote, tender his or her written resignation to the Chair of the Board for consideration by the Board, subject to the procedures set forth in the guidelines.

The Board has adopted a Code of Ethics that is applicable to our Chief Executive Officer and senior financial officers. The Board has also adopted a Code of Ethics and Business Conduct that applies to all of our officers, directors, and associates. Any amendment to either code or any waiver of either code for executive officers or directors will be disclosed promptly on our website at www.riteaid.com.

The Company’s directors, officers and other associates are prohibited from engaging in hedging or monetization transactions, such as zero-cost collars, equity swaps, exchange funds and forward sale contracts, with respect to our securities. Because hedging transactions might allow a director, officer or other associate to continue to own our securities, whether obtained through our equity compensation plans or otherwise, without the full risks and rewards of ownership, such hedging transactions are prohibited. Directors, officers and other associates are also prohibited from holding in a margin account, or otherwise pledging, Company securities as collateral for a loan.

The Board of Directors, as a whole and through the various committees of the Board, oversees the Company’s management of risk, focusing primarily on four areas of risk (1) strategic, (2) operational, (3) financial, and (4) regulatory compliance.

The Board considers and discusses risks in connection with strategic, operating, financial, compliance, specific approval matters, and other special risk topics such as cybersecurity. The Board may delegate responsibility for oversight of selected risks to the appropriate Board committee as described below.

Management of the Company is responsible for developing and implementing the Company’s plans and processes for risk management. The Board believes that its leadership structure, described above, supports the risk oversight function of the Board. The Board of Directors, at least annually, reviews with management its plans and processes for managing risk. The Board also receives periodic updates from the Company’s ethics and compliance and internal assurance services departments with regard to the overall effectiveness of the Company’s compliance and internal audit programs and significant areas of risk to the Company.

The Board delegated to the Audit Committee oversight of the Company’s compliance program, and therefore the Committee has the primary oversight role with respect to many of the risks of the Company.

 

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The Board and the Audit Committee also receive periodic updates from the Company’s Chief Information Officer and/or Chief Information Security Officer on cybersecurity matters, including information services security and security controls over credit card, customer, associate, and patient data. These updates also include information regarding the Rite Aid Information Security Program, managed by Rite Aid’s Chief Information Security Officer, which is designed to protect information and critical resources from a wide range of threats in order to ensure business continuity, minimize business risk, and maximize return on investments and business opportunities. The objective in the development and implementation of the Information Security Program is to create effective administrative, technical, and physical safeguards in order to protect the data of Rite Aid and its subsidiaries and the data of any customers and clients of these entities. In addition, the Audit Committee focuses on assessing and mitigating financial reporting risks, including risks related to internal control over financial reporting as well as legal and regulatory compliance, cyber risk and enterprise risk management.

The Compensation Committee considers risks relating to the Company’s compensation programs and policies, reviews all incentive plans relative to established criteria and conducts an assessment to ensure that none of our incentive plans encourage excessive risk-taking by our executives or associates. The Compensation Committee reviews the risk profile and the relationship between the Company’s compensation programs to the overall risk profile of the Company. Some of the features of our compensation incentive programs that limit risk include:

•

Delivery of compensation through an appropriate mix of base salary, short-term cash incentive awards, long-term awards, and benefits.

​

•

Use of a mix of long-term incentive vehicles that reward both stock price appreciation and financial operating performance and have different risk profiles.

​

•

Incorporation of measures in the performance awards to assess our ability to drive stock performance through profitability, leverage reduction and growth, and to compare our stock performance against the Russell 3000 Index (total stockholder return).

​

•

Meaningful stock ownership requirements for executives.

​

The Compensation Committee has considered the risks arising from the Company’s compensation policies and practices for its executives and associates and has concluded that the compensation policies and practices are not reasonably likely to have a material adverse effect on the Company.

 

20 | RITE AID CORPORATION   2022 Proxy Statement

The Board of Directors has four standing committees:

The current members of the committees are identified in the following table.

 

RITE AID CORPORATION   2022 Proxy Statement | 21

 

22 | RITE AID CORPORATION   2022 Proxy Statement

Kate B. Quinn (Chair), Robert E. Knowling, Jr., and Louis P. Miramontes served on the Compensation Committee during fiscal year 2022. During fiscal year 2022, no member of the Compensation Committee was an employee, former employee, or executive officer of the Company, nor does any such member have any interlocking relationships as defined by applicable SEC rules.

 

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The Nominating and Governance Committee considers the periodic rotation of Committee members and Committee Chairs to introduce fresh perspectives and to broaden and diversify the views and experience represented on the Committees. Through this periodic refreshment, the Nominating and Governance Committee considers, among other things, the benefits from continuity and depth of experience with the benefits of fresh perspectives and exposing our directors to different aspects of our business.

In fiscal year 2023, certain Committees will refresh as follows: Arun Nayar will join the Compensation Committee (and remain a member of the Audit Committee). Louis Miramontes’ service on the Compensation Committee will end (and he will remain Chair of the Audit Committee). Bari Halam will become Chair of the Nominating and Governance Committee. These Committee assignments will become effective in June 2022.

The Board of Directors held 7 meetings during fiscal year 2022. Each director attended at least 75% of the aggregate number of meetings of the Board of Directors and meetings held by all committees on which such director served during the period for which such director served.

 

24 | RITE AID CORPORATION   2022 Proxy Statement

It is our policy that directors are invited and encouraged to attend the annual meeting of stockholders. All directors serving on the Board or nominated to serve on the Board at the time of the meeting attended the 2021 Annual Meeting of Stockholders.

The Nominating and Governance Committee identifies potential candidates by asking current directors and executive officers to notify the committee if they become aware of persons, meeting the criteria described below, who have had a change in circumstances that might make them available to serve on the Board—for example, retirement as a CEO or CFO of a public company or exiting government or military service. The Nominating and Governance Committee also, from time to time, may engage firms that specialize in identifying director candidates.

The Nominating and Governance Committee will consider director candidates recommended by stockholders. In considering such recommendations, the Nominating and Governance Committee will take into consideration the needs of the Board and the qualifications of the candidate. The Nominating and Governance Committee may also take into consideration the number of shares held by the recommending stockholder and the length of time that such shares have been held. To have a candidate considered by the Nominating and Governance Committee, a stockholder must submit the recommendation in writing and must include the following information:

•

The name of the stockholder and evidence of the person’s ownership of Rite Aid stock, including the number of shares owned and the length of time of ownership; and

​

•

The name of the candidate, the candidate’s resume or a listing of his or her qualifications to be a Rite Aid director, and the person’s consent to be named as a director if selected by the Nominating and Governance Committee and nominated by the Board.

​

The stockholder recommendation and information described above must be sent to Rite Aid Corporation, 30 Hunter Lane, Camp Hill, Pennsylvania 17011, Attention: Corporate Secretary. The Nominating and Governance Committee will accept recommendations of director candidates throughout the year. Generally, in order for a recommended director candidate to be considered for nomination to stand for election at an upcoming annual meeting of stockholders, the recommendation must be received by the Secretary not fewer than 120 days prior to the anniversary date of Rite Aid’s most recent annual meeting of stockholders. In the event an annual meeting is held on a date that is not within 25 days of such anniversary date, recommendations will be considered by the Nominating and Governance Committee in due course.

The Nominating and Governance Committee may review publicly available information, conduct an interview and/or check references to assess the person’s accomplishments and qualifications in light of the needs of the Board and the accomplishments and qualifications of any other candidates that the committee might be considering. The committee’s evaluation process does not vary based on whether or not a candidate is recommended by a stockholder, although, as stated above, the Board may take into consideration the number of shares held by the recommending stockholder and the length of time that such shares have been held.

The Board seeks to maintain an engaged, independent Board with broad experience and judgment that is committed to representing the long-term interests of our stockholders. The Nominating and Governance Committee believes that the minimum qualifications for serving as a Rite Aid director are:

•

that a candidate demonstrates, by significant accomplishment in his or her field, an ability to make a meaningful contribution to the Board’s oversight of Rite Aid’s business and affairs, and

​

•

that a candidate has an impeccable record and reputation for honest and ethical conduct in his or her professional and personal activities.

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In addition, the Nominating and Governance Committee examines a candidate’s specific experiences and skills, availability in light of other commitments, potential conflicts of interest, and independence from management and the Company. The Nominating and Governance Committee also takes into account a candidate’s ability to contribute to the diversity of background and experience represented by the Board. The Nominating and Governance Committee assesses its achievement of diversity through the review of Board composition as part of the Board’s annual self-assessment process.

 

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In order to promote discussion among the non-management directors, executive sessions (meetings of non-management directors without management present) are held regularly. Mr. Bodaken, Chair of the Board, presides at our executive sessions.

The Board has established a process to receive communications from stockholders and other interested parties. Stockholders and other interested parties may contact any member (or all members) of the Board, any Board committee, or any chair of any such committee by mail. Correspondence should be addressed to the Board of Directors or any such individual directors, or committee of directors by either name or title.

All communications received as set forth above will be opened by the Corporate Secretary for the purpose of determining whether the contents represent a legitimate communication to the directors. Such communications, other than business solicitations or advertisements, junk mail and mass mailings, new product suggestions, product complaints, product inquiries, resumes and other forms of job inquiries, spam, and surveys, will be distributed to the Board, the non-management directors, an individual director, or a committee of directors, as appropriate.

As highlighted in the proxy statement summary above, Rite Aid is committed to embedding sustainability throughout our business and the communities we serve. Our journey is highlighted below:

In 2019, Rite Aid formed a Corporate Sustainability Committee, with representation from multiple functional leaders within the organization, which produces our annual ESG report each June and evaluates our current ESG initiatives, risks and opportunities.

In 2020, we made a concerted effort to further enhance our strategy and overall approach to sustainability. Our strategy was influenced by reporting frameworks, ESG ratings opportunities, engagements with stockholders, stakeholder expectations and emerging trends. We identified several key areas of opportunity to expand our environmental, social and governance efforts, and launched our four ESG Pillars, each with a high-level goal: Thriving Planet, Thriving Business, Thriving Workplace, and Thriving Community.

In 2021, we began laying the groundwork towards setting additional quantifiable metrics and targets that support the achievement of our high level ESG goals, specifically to each pillar. Progress around our fiscal year 2022 efforts will be released in our fiscal year 2022 ESG report.

Governance and board oversight is an essential part of managing our sustainability agenda and aligning with our broader vision and business strategy. Our Corporate Sustainability Committee met twice last year and provided updates to the Board and, going forward, will provide quarterly updates to the Nominating and Governance Committee. Updates regarding DEI matters are provided to our Compensation Committee. The Corporate Sustainability Committee will continue to stay engaged with both our executive leadership team and the Board as our program continues to progress. Our ESG report is released annually each June and is available at the website below.

 

26 | RITE AID CORPORATION   2022 Proxy Statement

The Board regularly reviews corporate governance developments and will modify these materials and practices from time to time as warranted.

Under our written policy, the Nominating and Governance Committee is responsible for the review, approval, or ratification of “related person transactions” between the Company or its subsidiaries and related persons. Under SEC rules, a related person is, or any time since the beginning of the last fiscal year was, a director, an executive officer, a nominee for director, a more than 5% stockholder of the Company, or an immediate family member (as defined under applicable SEC rules) of any of the foregoing. A related person transaction is any transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which the Company or a subsidiary is a participant, the amount involved exceeds $120,000, and a related person had, has or will have a direct or indirect material interest.

Directors, executive officers and nominees must complete an annual questionnaire and disclose all potential related person transactions involving themselves and their immediate family members that are known to them.

Throughout the year, directors and executive officers must notify the Corporate Secretary and Chief Accounting Officer of any potential related person transactions as soon as they become aware of any such transaction. The Corporate Secretary and Chief Accounting Officer inform the Nominating and Governance Committee of any related person transaction of which they are aware. The Corporate Secretary and Chief Accounting Officer are responsible for conducting a preliminary analysis and review of potential related person transactions and

 

RITE AID CORPORATION   2022 Proxy Statement | 27

presentation to the Nominating and Governance Committee for review, including provision of additional information to enable proper consideration by the Nominating and Governance Committee.

The Corporate Secretary and Chief Accounting Officer determine whether the proposed transaction should be submitted to the Nominating and Governance Committee for consideration at the next committee meeting or, if the Corporate Secretary and Chief Accounting Officer, in consultation with the Chief Executive Officer or Chief Financial Officer, determine that it is not practicable or desirable for the Company to wait until the next committee meeting, to the Chair of the Nominating and Governance Committee (who will possess delegated authority to act between committee meetings). As necessary, the Nominating and Governance Committee reviews approved related person transactions on a periodic basis throughout the duration of the transaction to ensure that the transactions remain in the best interests of the Company. The Nominating and Governance Committee may, in its discretion, engage outside counsel to review certain related person transactions. In addition, the Nominating and Governance Committee may request that the full Board of Directors consider the approval or ratification of related person transactions if the Nominating and Governance Committee deems it advisable.

The brother of the Company’s Executive Vice President, Chief Financial Officer, Matthew Schroeder, is a partner in the law firm of Littler Mendelson P.C. The Company paid the law firm approximately $391,000 in fiscal year 2022 for employment-related matters. These legal services were provided to Rite Aid on an arm’s length basis. Mr. Schroeder has never had any role or involvement in the supervision of these services provided to Rite Aid or in any decisions regarding the retention of Littler Mendelson. The Company’s relationship with Littler Mendelson pre-dates Mr. Schroeder becoming an executive officer of Rite Aid. The Nominating and Governance Committee has reviewed the Company’s ongoing relationship with Littler Mendelson to ensure that it remains in the best interests of the Company. Further, prior to December 31, 2021, the Company transitioned that work to other law firms that results in related persons not having a material interest in this work.

The sister of the Company’s Executive Vice President, Chief Legal Officer, and Secretary, Paul Gilbert, is a partner in the law firm of Bradley Arant Boult Cummings LLP (“Bradley Arant”). The Company paid the law firm approximately $250,000 in fiscal year 2022 for certain opioid litigation-related matters. These legal services provided to Rite Aid on an arm’s length basis. Mr. Gilbert did not have a role in the decision regarding the retention of Bradley Arant, which pre-dates Mr. Gilbert becoming an associate and executive officer of Rite Aid. The Nominating and Governance Committee has reviewed the Company’s ongoing relationship with Bradley Arant to ensure that it remains in the best interests of the Company. Further, prior to December 31, 2021, the Company transitioned that work to other law firms that results in related persons not having a material interest in this work.

​

(1)

Fees payable quarterly in arrears.

​

 

28 | RITE AID CORPORATION   2022 Proxy Statement

On April 14, 2021, the Compensation Committee reviewed a director compensation study prepared by Mercer, the committee’s compensation consultant, and the Board approved the Director compensation package for the non-employee Directors. The Mercer study showed that elements of the director compensation program were not aligned with the market. No changes were made to the non-management director annual cash payment of $100,000, payable quarterly in arrears. Beginning July 1, 2021, Committee Chairs’ annual cash retainers were increased to better reflect market competitiveness. These changes are as follows: (i) the Independent Chair of the Board receives an additional annual cash payment of $165,000 (previously $120,000); (ii) the Chair of the Audit Committee receives an additional annual cash payment of $25,000 (previously $20,000); (iii) the Chair of the Compensation Committee receives an additional annual cash payment of $20,000 (previously $10,000); (iv) the Nominating and Governance Committee receives an additional annual cash payment of $25,000 (previously $10,000); and (v) each member of the Audit Committee (other than the Chair) receives an additional annual cash payment of $10,000. Non-management directors also receive an annual award of restricted stock units. Additionally, the annual stock award value was increased to better reflect market competitiveness. Effective July 7, 2021, the annual award of restricted stock units was increased from a value of $120,000 to $160,000 (with the number of shares subject to the grant calculated by dividing 160,000 by the closing price of our common stock on the date of grant, rounded to the nearest whole share).

The annual award of restricted stock units for fiscal year 2022 vested on the date of grant and the shares subject to the grant will become payable on a deferred basis upon the separation from service of the director.

A non-management director may also defer cash fees under the Rite Aid Corporation Director Deferred Compensation Plan established by the Company for compensation earned on or after January 1, 2021. Cash fees deferred are allocated to a bookkeeping account for the non-management director and notionally invested in accordance with the director’s election among a subset of investment funds available under the Company’s 401(k) savings plan. A non-management director’s deferral is paid on the director’s separation from service in a single lump sum. For fiscal year 2022, solely Ms. Harlam elected to participate in the Director Deferred Compensation Plan. One hundred percent of Ms. Harlam’s cash fees in respect of fiscal year 2022 were deferred until separation from service pursuant to the plan.

Directors who are officers and/or Rite Aid associates receive no separate compensation for service as directors or committee members. Directors are reimbursed for travel and lodging expenses associated with attending Board of Directors and Board committee meetings.

Non-management directors are subject to our Stock Ownership Guidelines discussed in the Compensation Discussion and Analysis under the caption “Director and Officer Stock Ownership Guidelines.”

The following Director Compensation Table sets forth fees, awards, and other compensation paid to or earned by our non-management directors who served during the fiscal year ended February 26, 2022:

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(1)

Represents the grant date fair value of stock awards granted in fiscal year 2022 in accordance with Financial Accounting Standards Board (“FASB”) Topic 718. For information regarding the assumptions used in determining the fair value of an award, please refer to Note 18 to our financial statements contained in the Company’s Annual Report on Form 10-K

​

 

RITE AID CORPORATION   2022 Proxy Statement | 29

for the fiscal year ended February 26, 2022, filed with the SEC on April 25, 2022. Delivery of the shares underlying the restricted stock unit awards are immediately vested upon grant; however, shares are held until the directors’ separation from service.

(2)

As of February 26, 2022, no unvested restricted stock unit awards and no stock option awards were held by any director.

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30 | RITE AID CORPORATION   2022 Proxy Statement

The accounting firm of Deloitte & Touche LLP (“Deloitte & Touche”) has been selected as the independent registered public accounting firm for the Company for the fiscal year ending March 4, 2023. Deloitte & Touche has audited the accounts and records of Rite Aid and its subsidiaries since 2000. Although the selection of accounting firms does not require ratification, the Board of Directors has directed that the appointment of Deloitte & Touche be submitted to the stockholders for ratification due to the significance of their appointment by the Company. If the stockholders do not ratify the appointment of Deloitte & Touche, the Audit Committee will consider the appointment of another independent registered public accounting firm. A representative of Deloitte & Touche will be present at the Annual Meeting, will have the opportunity to make a statement, and will be available to respond to appropriate questions.

As outlined in the table below, we incurred the following fees, including expenses billed to the Company for the fiscal years ended February 26, 2022 and February 27, 2021 by our independent registered public accounting firm, Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu and their respective affiliates.

​

(1)

Audit fees. Represents fees for audit of annual financial statements and reviews of interim financial statements, registration statement filings and comfort letters related to various refinancing activities.

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(2)

Audit-related fees. The fees for the year ended February 26, 2022 represent fees for audits of employee benefit plans’ financial statements. The fees for the year ended February 27, 2021 represent fees for audits of employee benefit plans’ financial statements and acquisition-related due diligence procedures.

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(3)

Tax fees. Represents fees for tax compliance advice and planning.

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The Board of Directors has adopted a written charter of the Audit Committee which further describes the role of the Audit Committee. The Audit Committee, among other things, appoints and engages our independent registered public accounting firm and oversees our financial reporting and internal control over financial reporting processes on behalf of the Board. Management has the primary responsibility for our financial statements, our accounting principles and our internal control over financial reporting. Our independent registered public accounting firm is responsible for auditing our financial statements and expressing an opinion as to their conformity

 

RITE AID CORPORATION   2022 Proxy Statement | 31

with accounting principles generally accepted in the United States. Our independent registered public accounting firm also is responsible for expressing an opinion on the effectiveness of our internal control over financial reporting.

In fulfilling its oversight responsibilities, the Audit Committee met seven times during fiscal year 2022.

During those meetings, the Audit Committee:

•

Met with our internal auditors and independent registered public accounting firm, with and without management present, to discuss the overall scope and plans for their respective audits, the results of their examinations, their evaluations of our internal control over financial reporting and the overall quality of our financial reporting.

​

•

Reviewed and discussed with management and our independent registered public accounting firm, for their respective purposes, the audited financial statements included in our Annual Report on Form 10-K for fiscal year 2022. The discussions included the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments and the clarity of disclosures in the financial statements and the Annual Report on Form 10-K for fiscal year 2022.

​

•

Reviewed the unaudited interim financial statements and Forms 10-Q prepared each quarter by the Company.

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•

Received management representations that the Company’s financial statements were prepared in accordance with accounting principles generally accepted in the United States of America.

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•

Reviewed and updated the Audit Committee charter.

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•

Reviewed and discussed with our independent registered public accounting firm those matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC.

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•

Discussed with our independent registered public accounting firm matters relating to their independence and received the written disclosures and the letter from our independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence. The Audit Committee has considered whether the level of non-audit related services provided by our independent registered public accounting firm is consistent with maintaining their independence.

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•

Pre-approved audit, other audit-related and tax services performed by our independent registered public accounting firm.

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In addition to pre-approving the audit and other audit-related and tax services performed by our independent registered public accounting firm, the Audit Committee requests fee estimates associated with each proposed service. Providing a fee estimate for a service incorporates appropriate oversight and control of the independent registered public accounting firm relationship. On a quarterly basis, the Audit Committee reviews the status of services and fees incurred year-to-date against pre-approved services and fee estimates.

Based on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in our Annual Report on Form 10-K for the fiscal year ended February 26, 2022 for filing with the SEC.

Louis P. Miramontes, Chair
Elizabeth Burr
Arun Nayar

 

32 | RITE AID CORPORATION   2022 Proxy Statement

In accordance with the requirements of Section 14A of the Exchange Act, stockholders have the opportunity to approve on an advisory, nonbinding basis the compensation of the named executive officers disclosed in this proxy statement. This is commonly referred to as a “say on pay” advisory vote. The Board of Directors recommends that you vote “FOR” this proposal.

As discussed in greater detail in the “Compensation Discussion and Analysis” ​(CD&A) section of this proxy statement, our executive compensation program is designed to attract, motivate, and retain the most talented and dedicated executives and to align the interests of our named executive officers with the interests of our stockholders. The Company’s compensation program is designed to:

•

reward our named executive officers for the achievement of annual and long-term strategic and operational goals and the achievement of increased total stockholder return, and

​

•

avoid the encouragement of unnecessary or excessive risk-taking.

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The Company encourages stockholders to review the executive compensation disclosure in the CD&A and executive compensation tables in this proxy statement for complete details of its compensation program for its named executive officers and how the program is designed to achieve the Company’s compensation objectives.

We are asking our stockholders to indicate their support for the compensation of our named executive officers as described in this proxy statement. This vote is not intended to address any specific item of compensation; rather, the vote relates to the overall compensation of our named executive officers as described in this proxy statement.

The Board is presenting this proposal, which gives stockholders the opportunity to endorse or not endorse our executive pay program, on an advisory basis, by voting on the following resolution:

“RESOLVED, that the stockholders of the Company approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed pursuant to Item 402 of Securities and Exchange Commission Regulation S-K, including the Compensation Discussion and Analysis, the compensation tables and narrative disclosures.”

Although the advisory vote is non-binding, the Board of Directors values the opinions of stockholders. The Compensation Committee will review the results of the vote and will consider stockholders’ concerns and take into account the outcome of the vote when considering future decisions concerning our executive compensation program.

 

RITE AID CORPORATION   2022 Proxy Statement | 33