2018 Guide to Effective Proxies

2.17.10 Peer groups | 481 6 TH EDITION | GUIDE TO EFFECTIVE PROXIES EXECUTIVE COMPENSATION Compensation Discussion and Analysis COMPETITIVE COMPENSATION TARGETS AND THE ROLE OF THE INDUSTRY GROUP In 2017, FW Cook and management each independently utilized data from the Willis Towers Watson (“Towers”) executive compensation database, which includes executive compensation data for over 700 U.S.-based companies (the “Comparison Data”), to assist in establishing compensation targets for 2017. • The Comparison Data was provided by Towers on an aggregated basis: it reported actual salary levels and target levels of performance-based compensation and was adjusted to January 2017 using a three percent annual update factor. • Towers used regression analysis to size-adjust the compensation data due to significant variance in size among the companies compared to VF’s approximate annual revenue range. • Neither the Committee nor management receives or uses information on any subset of the Towers database and the Committee and management are not aware of the identities of the individual companies in the database. • FW Cook utilized that data to recommend compensation targets for the Chairman and Chief Executive Officer, and the Chairman and Chief Executive Officer utilized the data to recommend compensation targets for the other named executive officers. In addition, the Committee utilizes an Industry Group to evaluate whether executive officer pay levels are reasonable on a relative basis. The Committee primarily identifies companies that are of comparable size (based on revenue and market capitalization), and meet a majority of several criteria, such as • having significant non-US (greater than 30%) revenue, • having similar products and/or customers, • having manufacturing operations, • having a significant number of brands (at least 10, excluding licensed brands to the extent possible), • considers VF as a compensation peer, • is a peer of peers being listed as a compensation peer in at least four other current peer companies, and • is a 2017 peer company identified by Institutional Shareholder Services (ISS), a leading independent proxy advisory firm. The Industry Group fall into the following business types: APPAREL/FOOTWEAR Adidas AG Levi Strauss & Company Nike, Inc. PVH Corporation Ralph Lauren Corporation Under Armour, Inc. CONSUMERPRODUCTS Colgate-Palmolive Company Estee Lauder Companies, Inc. General Mills, Inc. Kimberly-Clark Corporation Tapestry, Inc. Gap, Inc. L Brands, Inc. Kohl’s Corporation Macy’s, Inc. Nordstrom, Inc. VERTICALRETAILERS LARGEFORMATRETAILERS INDUSTRYGROUP2017 The Committee sets target total direct compensation (base salary, target annual cash incentive awards and target annual long-term equity incentive award values) for senior executives generally between the 50th and 75th percentile of the Comparison Data (subject to the fluctuation of foreign exchange rates for executives paid in currency other than the U.S. dollar). The Committee considers the scope of the executive’s duties, the executive’s experience in his or her role and 22 VF CORPORATION | 2018 ANNUAL MEETING OF SHAREHOLDERS VF CORPORATION