DEF: Deere & Co. Details 2026 Annual Meeting, Executive Pay, and Governance

Deere & Company announces its 2026 Annual Meeting of Shareholders, outlining proposals for director elections, executive compensation, auditor ratification, and addressing shareholder proposals, while highlighting strong fiscal 2025 performance.

Summary

• The 2026 Annual Meeting of Shareholders will be held virtually on Wednesday, February 25, 2026, at 10 a.m. CST, with a record date of December 30, 2025.
• Shareholders will vote on the election of 10 director nominees, an advisory vote on executive compensation, ratification of Deloitte & Touche LLP as the independent auditor for fiscal 2026, and three shareholder proposals.
• Fiscal 2025 performance highlights include Net Sales & Revenues of $45.7 billion, Net Income of $5.0 billion, Diluted Earnings Per Share of $18.50, and Operating Cash Flow of $7.5 billion.
• The common stock closed at $461.63 per share at the end of fiscal 2025, a 13% increase from $407.93 at the end of fiscal 2024.
• The Short-Term Incentive (STI) program achieved an overall payout of 160.8% of target, driven by strong Operating Return on Operating Assets (OROA) of 21.7% (target 21.0%), Operating Return on Sales (OROS) of 12.6% (target 11.0%), and Return on Equity (ROE) of 12.5% (target 11.1%).
• The Long-Term Incentive Cash (LTIC) plan for the 2023-2025 period resulted in a 150% payout after a 25% reduction due to relative Total Shareholder Return (rTSR) at the 23rd percentile.
• Performance Stock Unit (PSU) awards for the 2023-2025 period resulted in a 0% payout due to relative revenue growth falling below the 25th percentile.
• The Board has implemented several governance enhancements, including refined Board membership criteria, clarified director time commitments, and established a continuing education series for directors.
• Michael O. Johanns will retire from the Board, and Brian Sikes was appointed as a new director in December 2025.

Sentiment

Score: 7

Explanation: The filing presents a generally positive outlook, emphasizing strong operational performance and financial results in a challenging market, leading to high short-term incentive payouts. However, the underperformance in some long-term incentive metrics (0% PSU payout, 25% LTIC reduction) introduces a degree of caution, preventing a higher score.

Positives

• Achieved strong fiscal 2025 financial results with Net Sales & Revenues of $45.7 billion, Net Income of $5.0 billion, Diluted EPS of $18.50, and Operating Cash Flow of $7.5 billion.
• Common stock price increased by 13% to $461.63 per share at the end of fiscal 2025.
• Delivered strong Total Shareholder Return (TSR), outperforming the fiscal 2025 performance peer group's median in the fiveand ten-year periods, and the S&P 500 in the ten-year period.
• Overall Short-Term Incentive (STI) performance was 160.8% of target, reflecting strong execution and operational resilience.
• Operating Return on Operating Assets (OROA) reached 21.7% against a target of 21.0%, resulting in a 121.7% payout.
• Operating Return on Sales (OROS) achieved 12.6% versus a target of 11.0%, leading to a maximum payout of 200.0%.
• Return on Equity (ROE) for financial services landed at 12.5% compared to a target of 11.1%, resulting in a maximum payout of 200.0%.
• Increased STI performance targets for fiscal 2025 demonstrate a commitment to rigorous performance standards and align with Leap Ambitions.
• Approximately 92% of the CEO's and 83% of other NEOs' total compensation was variable and at-risk, with 54% and 50% respectively being performance-based, enhancing alignment with shareholder interests.
• The Board has added six new directors over the past seven years, bringing diverse perspectives and skill sets.
• Enhanced corporate governance practices include refined Board membership criteria, clarified director time commitments, and a continuing education series for directors.

Negatives

• The Performance Stock Unit (PSU) component of the Long-Term Incentive (LTI) program for the 2023-2025 period resulted in a 0% payout due to relative revenue growth falling below the 25th percentile.
• The Long-Term Incentive Cash (LTIC) payout for the 2023-2025 period was reduced by 25% to 150% of target due to below-threshold relative Total Shareholder Return (rTSR) at the 23rd percentile.
• The Board recommends voting AGAINST all three shareholder proposals, indicating potential disagreements with certain shareholder initiatives.

Risks

• The agricultural business cycle can be unpredictable.
• Effects of trade laws, regulations, and policies on profitability.
• Ability to execute business strategies effectively.
• Ability to understand and meet customers' changing expectations for products and solutions.
• Negative claims or publicity that damage reputation or brand.
• Ability to adapt in highly competitive markets.
• Ability to attract, develop, engage, and retain qualified employees.
• Cybersecurity and artificial intelligence risks are under the oversight of the Audit Review Committee.
• Cognizable litigation and reputation risk related to emission reduction goals, including potential anti-greenwashing actions by the SEC.

Future Outlook

The company remains committed to delivering groundbreaking solutions that address real-world challenges, elevate industry standards, and drive continued progress. In 2025, important innovations were introduced for agricultural customers (F8/F9 forage harvesters, updated round balers, sophisticated harvesting tools, improved planters/sprayers) and Construction & Forestry (850 X-Tier dozer, upgraded P-Tier dozers, utility loaders with SmartDetect Digital). The Leap Ambitions were refined in December 2025 to guide the Smart Industrial Operating Model towards 2030, focusing on product efficiency, hybridization, electrification, and renewable fuels to create new revenue opportunities and reduce GHG emissions.

Management Comments

• "We run so life can leap forward — we help customers meet the growing needs for food, fuel, clothing, and infrastructure."
• "Over the past five years, our Smart Industrial Operating Model has driven our growth and success, transforming agriculture and construction through advanced technologies."
• "We remain committed to delivering groundbreaking solutions that address real-world challenges, elevate industry standards, and drive continued progress for our company and those we serve."
• "During a period marked by significant industry challenges, our employees demonstrated remarkable resilience by working to transform obstacles into opportunities while consistently upholding our core values."

Industry Context

Deere & Company operates in a cyclical industry influenced by macroeconomic forces, commodity prices, acreage planted, crop yields, and government policies. The Smart Industrial Operating Model is designed for resiliency across these business cycles, emphasizing operational excellence, disciplined capital allocation, and technology-driven solutions. The company's performance in fiscal 2025, despite being a 'trough year' with challenging market conditions, reflects structural improvements in its business model.

Comparison to Industry Standards

• Outperformed the fiscal 2025 performance peer group's median (a subset of the S&P 500 Industrials) in Total Shareholder Return (TSR) over the fiveand ten-year periods.
• Outperformed the S&P 500 in TSR over the ten-year period.
• Executive compensation targets are generally positioned at approximately the 50th percentile versus a compensation peer group of 16 leading U.S.-based diversified, global, industrial manufacturing companies with comparable sales and market capitalization.
• Performance Stock Unit (PSU) targets for relative TSR and relative revenue growth are set at the 50th percentile, aligning with competitive market practices where most peer companies set targets at the median.

Management Changes

Corporate Governance

Related Party Transactions

• The brother-in-law of Joshua A. Jepsen (Senior Vice President and Chief Financial Officer) is an employee in the Production and Precision Agriculture segment, earning approximately $206,762 in direct cash compensation and customary benefits in fiscal 2025. Mr. Jepsen does not directly or indirectly supervise him.
• The brother of Deanna M. Kovar (President, Worldwide Agriculture & Turf Division) is a manager in the marketing and sales function of the Production and Precision Agriculture segment, earning approximately $405,864 in direct cash compensation and customary benefits in fiscal 2025. Ms. Kovar does not directly supervise him, and a reporting structure is in place to address potential conflicts of interest.

Stakeholder Impact

• **Shareholders:** Direct impact through voting on directors, executive compensation, and auditor ratification. Value creation through strong financial performance and strategic initiatives. Engagement through shareholder outreach and proposals.
• **Employees:** Opportunities for meaningful careers, professional development, and an inclusive workplace. Compensation and benefits are designed to attract, retain, and motivate high-caliber talent. Security and safety are prioritized.
• **Customers:** Benefit from innovative products and solutions designed to enhance productivity, sustainability, and profitability in agriculture and construction, helping meet growing needs for food, fuel, clothing, and infrastructure.
• **Communities:** Financial contributions through the John Deere Foundation to organizations focused on ending hunger, alleviating poverty, and ensuring quality education in home communities.
• **Suppliers & Dealers:** Integral to the Smart Industrial Operating Model, contributing to the chain of livelihoods and supported by the company's operations.

Next Steps

• Shareholders to vote on director nominees, executive compensation, auditor ratification, and shareholder proposals at the Annual Meeting on February 25, 2026.
• Continue to deliver groundbreaking solutions that address real-world challenges and elevate industry standards.
• Ongoing investment in product efficiency, hybridization, electrification, and renewable fuels.
• Further implementation of the Smart Industrial Operating Model and refined Leap Ambitions towards 2030.
• The Board and each active Board committee will conduct an annual performance self-evaluation.

Key Dates

Recommendation

Deere & Company demonstrated strong operational resilience and profitability in fiscal 2025, exceeding short-term incentive targets despite challenging market conditions. The company's strategic focus on its Smart Industrial Operating Model and Leap Ambitions provides a clear path for future growth and sustainable value creation. However, the mixed performance in long-term incentive metrics, specifically the 0% payout for PSUs due to relative revenue growth underperformance and the 25% reduction in LTIC payout due to relative TSR, indicates areas where long-term shareholder alignment could be stronger. Given the company's ability to perform well in a 'trough year' and its robust governance, a 'hold' recommendation is appropriate, suggesting continued monitoring of the execution of its long-term strategy and the impact of market cycles on its performance.

Keywords

Deere & Company, SEC filing, Proxy Statement, Annual Meeting, Executive Compensation, Corporate Governance, Director Election, Financial Performance, Shareholder Proposals, Sustainability, Risk Management, Agriculture, Construction, Manufacturing, Smart Industrial Operating Model, Leap Ambitions