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.    )
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material under §240.14a-12
RITE AID CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check all boxes that apply):

No fee required

Fee paid previously with preliminary materials

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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Rite Aid Corporation
30 Hunter Lane
Camp Hill, Pennsylvania 17011
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LETTER FROM OUR
INDEPENDENT BOARD CHAIR
June [•], 2022
On behalf of the Board of Directors of Rite Aid Corporation, I want to take this opportunity to invite you to attend our 2022 Annual Meeting of Stockholders. The meeting will be held at 3 p.m., Eastern Daylight Time, on Wednesday, July 27, 2022.
As you know, among the most critical responsibilities of the Board is to work closely with senior management to review and oversee the implementation of the Company’s long-term strategy. Together, we have:
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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.

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

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

Revenues of $24.56 billion, compared to $24.04 billion for fiscal year 2021.
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.
Sincerely,
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BRUCE G. BODAKEN
Chair of the Board
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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Rite Aid Corporation
30 Hunter Lane
Camp Hill, Pennsylvania 17011
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LETTER FROM OUR CHIEF
EXECUTIVE OFFICER
DEAR FELLOW STOCKHOLDERS:
June [•], 2022
Just over two years ago—days before COVID-19 impacted the world—we launched our RxEvolution strategy to unlock the value of our pharmacists, renew our retail and digital experience, and establish Elixir as a clearly differentiated market leader.
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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.

LETTER FROM OUR CHIEF EXECUTIVE OFFICER
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.
Sincerely,
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HEYWARD DONIGAN
President, Chief Executive Officer and Director
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.

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Rite Aid Corporation
30 Hunter Lane
Camp Hill, Pennsylvania 17011
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
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VIRTUAL MEETING
[MISSING IMAGE: tm217739d1_ic-pencilpn.jpg]RECORD DATE
July 27, 2022
3 p.m., Eastern
Daylight Time
www.virtualshareholdermeeting.com/RAD2022
Close of business on
June 2, 2022
AGENDA
Proposal
Board Recommendation
1
Election of eight directors to hold office until the 2023 Annual Meeting of Stockholders
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FOR all of the Board’s nominees
2
Ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm
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FOR
3
Advisory vote to approve the compensation of our named executive officers
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FOR
4
Approval of an amendment to the Rite Aid Corporation Amended and Restated 2020 Omnibus Equity Incentive Plan
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FOR
5
Approval of the amendments to the Rite Aid Corporation Amended and Restated Certificate of Incorporation to eliminate supermajority voting provisions
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FOR
6
Consider and vote on a stockholder proposal, if properly presented at the Annual Meeting
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AGAINST
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.

 
VOTING
Have your WHITE proxy card or voting instruction form in hand, with your individual control number, and follow the instructions.
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PHONE
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INTERNET
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MOBILE DEVICE
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MAIL
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VIRTUAL MEETING
Call
1-800-690-6903
(toll-free), 24/7
Visit
www.proxyvote.com,
24/7
Scan the
QR code
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Mark, sign and
date your proxy
card or voting
instruction form
and return it in
the postage-paid
envelope
During the virtual
meeting, go to
www.virtualshareholder
meeting.com/RAD2022
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
STOCKHOLDER MEETING TO BE HELD ON JULY 27, 2022
Your vote is important. Please read the proxy statement carefully and submit your vote as soon as possible. The Notice of Availability is being mailed and the proxy materials made available on or about June [•], 2022. The proxy statement and annual report, as well as the Company’s WHITE proxy card, are available at www.proxyvote.com.

 
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TABLE OF CONTENTS
1
Business Strategy and Performance in FY 2022
Stockholder Engagement Efforts
Board of Directors
Board and Governance Highlights
Executive Compensation Overview
Human Capital Management Efforts
Diversity, Equity and Inclusion Efforts
Environmental, Social & Governance Efforts
Director Nominees
Board Leadership Structure
Director Independence
Corporate Governance Practices
Board Oversight of Risk Management
Committees of the Board of Directors
22
23
23
24
24
Board Meeting Attendance
Director Nominations
Executive Sessions of Non-Management Directors
Communications with the Board of Directors
Environmental, Social & Governance Matters
Opioids and Our Communities
Corporate Governance Materials
Certain Relationships and Related Transactions
Directors’ Compensation
Auditor Fees
Audit Committee Report
Compensation Discussion and Analysis
Compensation Committee Report
Executive Compensation Tables
59
61
62
63
64
64
64
Pay Ratio Disclosure
Questions and Answers
Important Notice Regarding Delivery of Stockholder Documents
Stockholder Proposals for the 2023 Annual Meeting
Incorporation by Reference
Other Matters
Annual Report
Cautionary Statement Regarding Forward-Looking Statements
 

 
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PROXY STATEMENT SUMMARY
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:
Proposal
Board Recommendation
See Page
1
Election of eight directors to hold office until the 2023 Annual Meeting of Stockholder
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FOR all of the Board’s nominees
2
Ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm
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FOR
3
Advisory vote to approve the compensation of our named executive officers
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FOR
4
Approval of an amendment to the Rite Aid Corporation Amended and Restated 2020 Omnibus Equity Incentive Plan
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FOR
5
Approval of the amendments to the Rite Aid Corporation Amended and Restated Certificate of Incorporation to eliminate supermajority voting provisions
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FOR
6
Consider and vote on a stockholder proposal, if properly presented at the Annual Meeting
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AGAINST
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

 
PROXY STATEMENT SUMMARY
BUSINESS STRATEGY AND PERFORMANCE IN FY 2022
Our Enterprise Strategy
Rite Aid’s RxEvolution strategy was originally announced in March 2020, with a focus on fundamentally changing our role in health care and becoming the industry leader in whole health through three main pillars: 1) Unlocking the value of our pharmacists; 2) Renewing our retail and digital experience; and 3) Establishing Elixir as a clearly differentiated market leader.
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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.
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We plan to leverage these assets and drive growth in three ways:
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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.
 
2 | RITE AID CORPORATION   2022 Proxy Statement

 
PROXY STATEMENT SUMMARY
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.
Keeping Our Communities Safe During the COVID-19 Pandemic
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.
Fiscal Year 2022 Performance and Operational Highlights2
$24.6B
Total Revenue
$505.9M
Adjusted EBITDA
$1.9B
Total Liquidity
2.2%
Total Revenue Growth
502K
Prescriptions Filled
Each Day, On Average
(including
immunizations), in Rite
Aid & Bartell Stores
6,600
Pharmacists Serving
Our Communities
2,450
Retail Pharmacy
Locations across 17
States
3.1M
Average Monthly Lives Managed by Elixir
2
As of February 26, 2022 (figures are rounded).
 
RITE AID CORPORATION   2022 Proxy Statement | 3

 
PROXY STATEMENT SUMMARY
STOCKHOLDER ENGAGEMENT EFFORTS
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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WHO WE CONTACTED
HOW WE ENGAGED
WHAT WE DISCUSSED
During fiscal year 2022, we individually reached out to more than 30 stockholders who collectively own approximately
50%
of our outstanding stock.
If stockholders are interested in meeting, they are offered meetings with our Board Chairman, the Chair of the Compensation Committee, the CEO, and CFO.
We annually invite our largest
30+
stockholders
to individual meetings to discuss items of importance to them, such as executive and Board compensation, corporate governance, and ESG matters.
The Chair of the Compensation Committee and senior management are available to participate upon request. We also regularly engage with all stockholders as part of our ongoing investor relations program.

Stockholders’ positive feedback on our executive compensation program changes.

Financial performance including challenges of COVID-19 and benefits of vaccines and testing.

The importance of environmental, social and governance (ESG) initiatives, particularly related to carbon emissions reductions and renewable energy strategies.

Rite Aid’s growth and business strategy.

Continued expense management and cost control.

Further reduction of debt and free cash flow generation.

Board level oversight of diversity, equity and inclusion (DEI) strategy.

Human capital management matters including hiring, training, retaining a diverse workforce, and workplace safety.
 
4 | RITE AID CORPORATION   2022 Proxy Statement

 
PROXY STATEMENT SUMMARY
BOARD OF DIRECTORS
Board Refreshment
We have added 7 new directors to our Board since 2018, all of whom are either women or racially or ethnically diverse.
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Board Attributes
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RITE AID CORPORATION   2022 Proxy Statement | 5

 
PROXY STATEMENT SUMMARY
Director Nominees
Fiscal Year 2022 Committees
Director and Principal Occupation
Age
Director
Since
Independent
Audit
Compensation
Nominating and
Governance
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BRUCE G. BODAKEN
Former Chairman and Chief Executive
Officer, Blue Shield of California
70
2013;
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since
2018
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ELIZABETH “BUSY” BURR
Former President and Chief Commercial
Officer, Carrot Inc.
60
2019
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HEYWARD DONIGAN
President and Chief Executive Officer,
Rite Aid Corporation
61
2019
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BARI HARLAM
Co-Founder, Trouble LLC; and former
EVP, Chief Marketing Officer North
America, Hudson’s Bay Company
60
2020
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ROBERT E. KNOWLING, JR.
Chairman, Eagles Landing Partners
66
2018
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LOUIS P. MIRAMONTES
Former Managing Partner of the
San Francisco office and Senior Partner
for Latin America, KPMG LLP
67
2018
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ARUN NAYAR
Former Executive Vice President
and Chief Financial Officer,
Tyco International
71
2018
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KATE B. QUINN
Vice Chairman and Chief
Administrative Officer, U.S. Bancorp
57
2019
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Committee Chair
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Committee Member
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Chair of the Board
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Audit Committee Financial Expert
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.
BOARD AND GOVERNANCE HIGHLIGHTS
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All Board members are independent except the President and Chief Executive Officer
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Diverse chairs for Audit, Compensation and Nominating and Governance Committees
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Independent Chair of the Board
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All directors elected annually
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Majority voting for directors in uncontested elections
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Proxy access provisions in bylaws
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Holders of 10% of outstanding stock may call a special meeting of stockholders
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Mandatory director retirement age of 75
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Meaningful stock ownership requirements for the Board and executive officers
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Anti-hedging and anti-pledging policy for the Board and all associates
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Annual evaluation of the Board and committees
 
6 | RITE AID CORPORATION   2022 Proxy Statement

 
PROXY STATEMENT SUMMARY
EXECUTIVE COMPENSATION OVERVIEW
Philosophy and Objectives
Our executive compensation program is based on a pay-for-performance philosophy and is designed to accomplish the following goals:
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[MISSING IMAGE: tm217739d1_ic-checkpn.jpg]WHAT WE DO
[MISSING IMAGE: tm228886d1-icon_against4c.jpg]WHAT WE DO NOT DO
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Conduct annual stockholder advisory vote on the compensation of our named executive officers
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Maintain dialogue with stockholders on various topics, including executive pay practices
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Retain an independent executive compensation consultant to the Compensation Committee
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Ensure that a significant portion of executive officer total target remuneration is at risk
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Provide annual and long-term incentive plans with performance targets aligned to business goals
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Require a designated level of stock ownership for all named executive officers and non-management directors
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Require shares subject to the annual non-management director grant to be deferred until separation from service
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Require equity awards to have a double trigger (qualifying termination of employment and change in control)
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Complete an annual incentive compensation risk assessment
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Maintain a formal clawback policy for executive officers
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Provide gross-up payments to cover personal income taxes or excise taxes related to executive severance benefits
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Permit executives to engage in hedging or pledging of Rite Aid securities
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Reward executives for imprudent, inappropriate, or unnecessary risk-taking
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Allow the repricing of equity awards without stockholder approval
 
RITE AID CORPORATION   2022 Proxy Statement | 7

 
PROXY STATEMENT SUMMARY
Total Target Compensation
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.
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ENVIRONMENTAL, SOCIAL & GOVERNANCE EFFORTS
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.
Environmental
Climate Risk: In June 2021, we released our inaugural report aligned with the framework from the Task Force on Climate Related Financial Disclosures (TCFD). The report is available on our website and will be updated periodically.
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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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8 | RITE AID CORPORATION   2022 Proxy Statement

 
PROXY STATEMENT SUMMARY
Social
Human Capital Management Efforts: We are proud to employ over 53,000 associates as of the end of fiscal year 2022 across the United States, including Puerto Rico. Our associates are key to the success of our transformation as they are at the center of supporting the whole health of our customers and communities. We are optimizing our workforce through enhanced communication and engagement through the following measures:
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conducted a pay equity study through a consultant that produced favorable results;

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;

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;

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;

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

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;

offering an accredited pharmacy technician certification program;

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);

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

developing an associate recognition program that incorporates financial incentives to celebrate the achievements of our teams and create a community experience for our workforce.
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.
 
RITE AID CORPORATION   2022 Proxy Statement | 9

 
PROXY STATEMENT SUMMARY
Responsible Sourcing

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.

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.
Governance
Our Nominating and Governance Committee of the Board of Directors has direct oversight and responsibility of ESG, while our Compensation Committee has direct oversight of DEI. In fiscal year 2022, we provided quarterly updates to the Nominating and Governance Committee on our ESG progress.
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For more information, please see Rite Aid’s 2021 CSR Report at https://www.riteaid.com/content/dam/riteaid-web/corporate/2021-corporate-sustainability-report-final.pdf. Website content is not incorporated into this proxy statement.
 
10 | RITE AID CORPORATION   2022 Proxy Statement

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PROPOSAL 1—ELECTION OF DIRECTORS
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:

Bruce G. Bodaken

Robert E. Knowling, Jr.

Elizabeth “Busy” Burr

Louis P. Miramontes

Heyward Donigan

Arun Nayar

Bari Harlam

Kate B. Quinn
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.
Name
Age
Position with Rite Aid
Year First
Became Director
Bruce G. Bodaken
70
Chair
2013
Heyward Donigan
61
President, Chief Executive Officer and Director
2019
Elizabeth “Busy” Burr
60
Director
2019
Bari Harlam
60
Director
2020
Robert E. Knowling, Jr.
66
Director
2018
Louis P. Miramontes
67
Director
2018
Arun Nayar
71
Director
2018
Kate B. Quinn
57
Director
2019
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The Board of Directors unanimously recommends that you vote on the enclosed WHITE proxy card FOR the election of each of our nominees listed above.
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 | 11

PROPOSAL 1—ELECTION OF DIRECTORS
Board Attributes
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Board Refreshment
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.
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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
 
12 | RITE AID CORPORATION   2022 Proxy Statement

PROPOSAL 1—ELECTION OF DIRECTORS
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.
Board Skills and Experiences
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.
Skills and Experiences
Director
Board and
Corporate
Governance
Current or
Former CEO
Finance and
Accounting
Health Care
Industry
Management
and
Business
Operations
Retail
Industry
Bruce G. Bodaken [MISSING IMAGE: tm217739d1_ic-stark.jpg]
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Elizabeth “Busy” Burr
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Heyward Donigan
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Bari Harlam
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Robert E. Knowling, Jr.
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Louis P. Miramontes
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Arun Nayar
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Kate B. Quinn
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Total of 8 Directors
8
4
3
4
8
4
100%
50%
38%
50%
100%
50%
 
RITE AID CORPORATION   2022 Proxy Statement | 13

PROPOSAL 1—ELECTION OF DIRECTORS
DIRECTOR NOMINEES
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:
BRUCE G. BODAKEN
Mr. Bodaken shares in-depth knowledge of the health insurance and managed care industries with the Board of Directors, serving in executive leadership positions for over 20 years.
Experience

Chairman and Chief Executive Officer of Blue Shield of California from 2000 through 2012.

President and Chief Operating Officer of Blue Shield of California from 1995 to 2000, and as Executive Vice President and Chief Operating Officer from 1994 to 1995.

Senior Vice President and Associate Chief Operating Officer of F.H.P., Inc., a managed care provider, from 1990 to 1994 and held various positions at F.H.P. from 1980 to 1990.

Visiting Lecturer at the University of California School of Public Health from 2013 to 2016 teaching graduate courses on health care reform.

Visiting Scholar at the Brookings Institute from 2013 to 2015 focused on value-based care design.

Director and member of the compensation committee of iRhythm Technologies, Inc. and formerly a member of the board of directors of WageWorks, Inc.
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Age 70
Director since 2013
Chair since 2018
Committees

Executive (Chair)

Nominating and Governance
ELIZABETH “BUSY” BURR
Ms. Burr brings to the Board of Directors extensive experience in the health industry, innovation, business strategy, and brand management.
Experience

Former President and Chief Commercial Officer at Carrot Inc., a digital health care company with solutions that combine behavioral science, clinical expertise, and proprietary technology, from 2019 through 2021.

Chief Innovation Officer and Vice President of Healthcare Trend and Innovation at Humana from 2015 to 2018, where she led the design, build, and adoption of new product platforms in digital health, provider experience, and telemedicine. Founder of Humana’ Health Ventures, Humana’s strategic venture investing practice.

Former Managing Director of Citi Ventures, Citigroup’s global venture group, from 2011—2015. Prior to Citigroup, she spent seven years in investment banking at Morgan Stanley and Credit Suisse First Boston.

Former Vice President of Global Brand Management at Gap, Inc., where she was responsible for aligning the product, store, online, advertising, and merchandising efforts for the four Gap brands around the world.

Member of the boards of directors of Mr. Cooper Group Inc., a company that provides mortgage servicing, origination, and transaction-based services, Satellite Healthcare, a nonprofit provider of kidney dialysis services, and SVB Financial Group, a company that offers commercial, investment and private banking, asset management, private wealth management, brokerage and investment services and funds management services to companies in the technology, life sciences and health care, private equity and venture capital, and premium wine industries.
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Age 60
Director since 2019
Committees

Audit
 
14 | RITE AID CORPORATION   2022 Proxy Statement

PROPOSAL 1—ELECTION OF DIRECTORS
HEYWARD DONIGAN
Ms. Donigan brings to the Board strong senior executive experience, proven leadership capabilities, and a consistent track record of driving profitable growth, as well as broad health care knowledge and digital technology expertise.
Experience

President and Chief Executive Officer of the Company since February 2020 and Chief Executive Officer since August 2019.

President and Chief Executive Officer of Sapphire Digital, which designs and develops omni-channel platforms that help consumers choose their best fit health care providers, from 2015 to 2019. In that role, Ms. Donigan led Sapphire Digital’s strategy and operations to record growth and consumer engagement.

President and Chief Executive Officer of ValueOptions, Inc., then the nation’s largest independent behavioral health improvement company, from 2010 to 2015, where she drove innovation through disciplined execution and grew company revenues to over $1 billion.

Executive Vice President and Chief Marketing Officer at Premera Blue Cross, where she was responsible for driving profitable growth across the individual, small group, mid-market, and national account businesses and helped the company achieve record growth and profits.

Previously served as Senior Vice President of all operations at Cigna Healthcare and held executive roles at General Electric, Empire BCBS, and U.S. Healthcare.

In the last five years, served on the board of directors of Kindred Healthcare and NxStage Medical, Inc.
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Age 61
Director since 2019
Committees

Executive
BARI HARLAM
Ms. Harlam is a former C-suite business leader, marketer, educator, and author, and a pioneer in customer loyalty who provides the Board of Directors with her experience in digital marketing and data analytics.
Experience

Co-founder of Trouble LLC, a pro-social, experience brand.

Executive Vice President, Chief Marketing Officer North America at Hudson’s Bay Company from 2018 to 2020.

Executive Vice President, Membership, Marketing and Analytics at BJ’s Wholesale Club from 2012 to 2016.

Chief Marketing Officer at Swipely, now Upserve, from 2011 to 2012.

Senior Vice President, Member Engagement at CVS Health from 2000 to 2011.

Early in her career, was a Professor at Columbia University and the University of Rhode Island, and Adjunct Professor at the Wharton School, University of Pennsylvania.

Member of the Board of Directors of Eastern Bankshares, Inc., Alterian and OneWater Marine Inc.
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Age 60
Director since 2020
Committees

Nominating and Governance
 
RITE AID CORPORATION   2022 Proxy Statement | 15

PROPOSAL 1—ELECTION OF DIRECTORS
ROBERT E. KNOWLING, JR.
Mr. Knowling brings to the Board extensive experience in executive management and leadership roles, including experience leading companies through periods of high growth and organizational turnaround. In addition, his service on a number of other public company boards of directors enables Mr. Knowling to share insights with the Board regarding corporate governance best practices.
Experience

Chairman of Eagles Landing Partners, which specializes in helping senior management formulate strategy, lead organizational transformations, and re-engineer businesses, and also serves as an advisor-coach to chief executive officers.

Chief Executive Officer of Telwares, a provider of telecommunications expense management solutions, from 2005 to 2009.

Chief Executive Officer of the New York City Leadership Academy, an independent nonprofit corporation created by Chancellor Joel I. Klein and Mayor Michael R. Bloomberg that is chartered with developing the next generation of principals in the New York City public school system, from 2001 to 2005.

Chairman and Chief Executive Officer of SimDesk Technologies, a computer software company, from 2001 to 2003.

Previously was Chairman, President and Chief Executive Officer of Covad Communications, a Warburg Pincus private equity-backed start-up company.

Serves on the board of directors of Citrix, STRAND, and Stride, Inc. In the last five years, he served on the board of directors of Roper Technologies Inc. and Convergys.
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Age 66
Director since 2018
Committees

Compensation
LOUIS P. MIRAMONTES
Mr. Miramontes brings to the Board of Directors extensive experience in accounting, financial reporting, and corporate governance. His experience as an audit partner provides useful insights into financial and regulatory matters relevant to the Company’s business.
Experience

Independent financial advisor since 2014.

Worked at KPMG LLP from 1976 to 2014, where he served as Managing Partner of the San Francisco office and Senior Partner for KPMG’s Latin American region. He served as an audit partner for public and private companies.

Serves as a member of the board of directors of Lithia Motors, Inc., one of the largest auto retailers in the United States and Canada, and as a member of the board of directors of Oportun Financial Corporation, a financial services company.
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Age 67
Director since 2018
Committees

Audit (Chair)

Compensation
 
16 | RITE AID CORPORATION   2022 Proxy Statement

PROPOSAL 1—ELECTION OF DIRECTORS
ARUN NAYAR
Mr. Nayar brings over 35 years of financial management experience to the Board of Directors. His experience as a chief financial officer provides useful insights into operational and financial metrics relevant to the Company’s business.
Experience

Retired in 2015 as executive vice President and Chief Financial Officer of Tyco International, a $10+ billion fire protection and security company, where he was responsible for managing the company’s financial risks and overseeing its global finance functions, including its tax, treasury, mergers and acquisitions, audit, and investor relations teams. Mr. Nayar joined Tyco as senior vice president and treasurer in 2008, and was also Chief Financial Officer of Tyco’s ADT Worldwide. From 2010 until 2012, Mr. Nayar was senior vice president, Financial Planning & Analysis, Investor Relations, and treasurer.

Previously was in leadership positions with PepsiCo, Inc., most recently as Chief Financial Officer of Global Operations and, before that, as vice president and assistant treasurer—Corporate Finance.

Senior Advisor to McKinsey & Company and a Senior Advisor to a private equity firm, BC Partners, from 2016 to 2020.

A member of the board of directors of Amcor Plc, a manufacturer of responsible packaging products, and GFL Environmental Inc., a leading North American environmental services company. He previously served on the board of TFI International.
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Age 71
Director since 2018
Committees

Audit

Executive
KATE B. QUINN
Ms. Quinn brings to the Board of Directors extensive experience in business strategy, marketing, customer experience, retail operations, and health benefits.
Experience

Vice Chair and Chief Administrative Officer of U.S. Bancorp since 2017, responsible for leading strategy, reputation and digital transformation, Ms. Quinn joined U.S. Bancorp in 2013 as executive vice president and Chief Strategy and Reputation Officer.

Former senior vice president and Chief Marketing Officer at Anthem, a health benefits company, where she directed the company’s marketing, customer communications, digital, customer experience, and retail strategies. She previously served as Anthem’s vice president of corporate marketing.

Earlier in her career, Ms. Quinn served as Chief Marketing and Strategy Officer at a division of The Hartford, following leadership roles in strategy and product development at CIGNA and PacifiCare Health Systems, respectively.

Member of Board of Trustees of United Way U.S.A. and Fastbreak Foundation.
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Age 57
Director since 2019
Committees

Compensation (Chair)

Nominating and Governance
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

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CORPORATE GOVERNANCE AND BOARD MATTERS
BOARD LEADERSHIP STRUCTURE
The Board has determined that Mr. Bodaken will continue to serve as Chair of the Board.
As Chair, Mr. Bodaken’s responsibilities include:

presiding at all meetings of the Board, including executive sessions of the non-management directors

the authority to call meetings of the Board and of the non-management directors

serving as liaison between the Chief Executive Officer and independent directors and facilitating communications between other members of the Board and the Chief Executive Officer (any director is free to communicate directly with any associate, including with the Chief Executive Officer; the Chair’s role is to attempt to improve such communications if they are not entirely satisfactory)

working with independent directors and the Chief Executive Officer in the preparation of and approving Board meeting agendas and schedules, and the information to be provided to the Board

chairing the annual review of the performance of the Chief Executive Officer

otherwise consulting with the Chief Executive Officer on matters relating to corporate governance and Board performance, and

if requested, ensuring that he is available, when appropriate, for consultation and direct communication with stockholders.
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.
DIRECTOR INDEPENDENCE
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:

Bruce G. Bodaken

Louis P. Miramontes

Elizabeth “Busy” Burr

Arun Nayar

Bari Harlam

Kate B. Quinn

Robert E. Knowling, Jr.
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

CORPORATE GOVERNANCE AND BOARD MATTERS
There is no family relationship between any of the nominees and executive officers of Rite Aid.
CORPORATE GOVERNANCE PRACTICES
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.
Majority Voting Standard and Policy
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.
Codes of Ethics
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.
Anti-Hedging and Anti-Pledging Policies
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.
BOARD OVERSIGHT OF RISK MANAGEMENT
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.
 
RITE AID CORPORATION   2022 Proxy Statement | 19

CORPORATE GOVERNANCE AND BOARD MATTERS
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

CORPORATE GOVERNANCE AND BOARD MATTERS
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has four standing committees:
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Current copies of the charters for each of these committees are available on our website at www.riteaid.com under the headings “Corporate—Governance—Corporate Governance Committees—Committee Charters.”
The current members of the committees are identified in the following table.
Committees
Director
Independent
Audit
Compensation
Executive
Nominating and
Governance
Bruce G. Bodaken [MISSING IMAGE: tm217739d1_ic-stark.jpg]
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[MISSING IMAGE: tm217739d1_ic-committeepn.jpg]
[MISSING IMAGE: tm228886d1-icon_memberbw.jpg]
Elizabeth “Busy” Burr
[MISSING IMAGE: tm217739d1_ic-checkgreenpn.jpg]
[MISSING IMAGE: tm228886d1-icon_memberbw.jpg]
Heyward Donigan
[MISSING IMAGE: tm228886d1-icon_memberbw.jpg]
Bari Harlam
[MISSING IMAGE: tm217739d1_ic-checkgreenpn.jpg]
[MISSING IMAGE: tm228886d1-icon_memberbw.jpg]
Robert E. Knowling, Jr.
[MISSING IMAGE: tm217739d1_ic-checkgreenpn.jpg]
[MISSING IMAGE: tm228886d1-icon_memberbw.jpg]
Kevin E. Lofton
[MISSING IMAGE: tm217739d1_ic-checkgreenpn.jpg]
[MISSING IMAGE: tm228886d1-icon_memberbw.jpg]
[MISSING IMAGE: tm217739d1_ic-committeepn.jpg]
Louis P. Miramontes
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[MISSING IMAGE: tm217739d1_ic-committeepn.jpg][MISSING IMAGE: tm217739d1_ic-calculatork.jpg]
[MISSING IMAGE: tm228886d1-icon_memberbw.jpg]
Arun Nayar
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[MISSING IMAGE: tm228886d1-icon_memberbw.jpg][MISSING IMAGE: tm217739d1_ic-calculatork.jpg]
[MISSING IMAGE: tm228886d1-icon_memberbw.jpg]
Kate B. Quinn
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[MISSING IMAGE: tm217739d1_ic-committeepn.jpg]
[MISSING IMAGE: tm228886d1-icon_memberbw.jpg]
Number of Meetings in Fiscal 2022
7
6
0
6
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Committee Chair
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Committee Member
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Chair of the Board
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Audit Committee Financial Expert
 
RITE AID CORPORATION   2022 Proxy Statement | 21

CORPORATE GOVERNANCE AND BOARD MATTERS
AUDIT COMMITTEE
Meetings in Fiscal 2022: 7
Members

Louis P. Miramontes, Chair

Elizabeth “Busy” Burr

Arun Nayar
Qualifications
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The Board has determined that each member of the Audit Committee is an independent director under the NYSE listing standards and satisfies the additional independence requirements for audit committee members. See the section entitled “Corporate Governance—Director Independence” above.
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The Board has determined that each of these individuals is also “financially literate” under the applicable NYSE listing standards.
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The Board has determined that each of Louis P. Miramontes and Arun Nayar qualifies as an “audit committee financial expert” as that term is defined under applicable SEC rules.
Principal Responsibilities
Charter
The functions of the Audit Committee include the following:

Appointing, compensating, and overseeing our independent registered public accounting firm (“independent auditors”);

Overseeing management’s fulfillment of its responsibilities for financial reporting and internal control over financial reporting;

Overseeing the activities of the Company’s internal audit function; and

Reviewing the Company’s cybersecurity, information security and technology risks
For additional information, see the Audit Committee’s charter on our website at www.riteaid.com, under the headings “Corporate—Governance—Our Policies—Corporate Governance Committees—Audit Committee Charter.”
Audit Committee Report
The Audit Committee Report is located in “Proposal 2— Ratification of the Appointment of Independent Registered Public Accounting Firm” under the caption “Audit Committee Report.”
 
22 | RITE AID CORPORATION   2022 Proxy Statement

CORPORATE GOVERNANCE AND BOARD MATTERS
COMPENSATION COMMITTEE
Meetings in Fiscal 2022: 6
Members

Kate B. Quinn, Chair

Robert E. Knowling, Jr.

Louis P. Miramontes
Qualifications
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The Board has determined that each member of the Compensation Committee is an independent director under the NYSE listing standards and satisfies the additional independence requirements for compensation committee members. See the section entitled “Corporate Governance—Director Independence” above.
Principal Responsibilities
The functions of the Compensation Committee include the following:

Administering Rite Aid’s equity incentive plans;

Reviewing and approving the base salaries of executive officers and reviewing and recommending to the Board the base salary of the CEO (along with other compensation elements as deemed necessary);

Reviewing and approving goals and objectives relevant to the incentive-based compensation of executive officers, evaluating the performance of executive officers, and determining and approving the incentive-based compensation of executive officers;

Setting corporate performance targets under all annual bonus and long-term incentive compensation plans and determining annually the individual bonus award opportunities for executive officers;

Reviewing and approving executive officers’ employment agreements and severance arrangements;

Reviewing the Company’s succession planning for the CEO and other executive officers; and

Reviewing and making recommendations to the Board on employee engagement and DEI initiatives, objectives and progress.
Independent Compensation Consultant
As provided in its charter, the Compensation Committee has the authority to engage an external compensation consultant and to determine the scope of any services provided. The Compensation Committee may terminate the engagement at any time. The external compensation consultant reports to the Compensation Committee Chair.
Charter
For additional information, see the Compensation Committee’s charter on our website at www.riteaid.com, under the headings “Corporate—Governance—Our Policies—Corporate Governance Committees—Compensation Committee Charter.”
Compensation Committee Report
The Compensation Committee Report is located at the end of the “Compensation Discussion and Analysis” under the caption “Compensation Committee Report.”
Compensation Committee Interlocks and Insider Participation
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.
 
RITE AID CORPORATION   2022 Proxy Statement | 23

CORPORATE GOVERNANCE AND BOARD MATTERS
NOMINATING AND GOVERNANCE COMMITTEE
Meetings in Fiscal 2022: 6
Members

Kevin E. Lofton, Chair

Bruce G. Bodaken

Bari Halam

Kate B. Quinn
Qualifications
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The Board has determined that each member of the Nominating and Governance Committee is an independent director under the NYSE listing standards. See the section entitled “Corporate Governance—Director Independence” above.
Principal Responsibilities
The functions of the Nominating and Governance Committee include the following:

Identifying and recommending to the Board individuals qualified to serve as Rite Aid directors;

Recommending to the Board individual directors to serve on committees of the Board;

Advising the Board with respect to matters of Board composition and procedures;

Developing and recommending to the Board a set of corporate governance principles applicable to Rite Aid and overseeing corporate governance matters generally;

Overseeing the annual evaluation of the Board and management;

Reviewing and approving or ratifying related person transactions in which the Company is a participant; and

Overseeing the ESG policies, trends and activities of the Company.
Charter
For additional information, see the Nominating and Governance Committee’s charter on our website at www.riteaid.com, under the headings “Corporate—Governance—Our Policies—Corporate Governance Committees—Nominating and Governance Committee Charter.”
EXECUTIVE COMMITTEE
Meetings in Fiscal 2022: 0
Members

Bruce G. Bodaken, Chair

Heyward Donigan

Kevin E. Lofton

Arun Nayar
Principal Responsibilities
Charter
The Executive Committee did not meet during fiscal year 2022.
The Executive Committee, except as limited by Delaware law, is empowered to exercise all of the powers of the Board of Directors.
For additional information, see the Executive Committee’s charter on our website at www.riteaid.com, under the headings “Corporate—Governance—Our Policies—Corporate Governance Committees—Executive Committee Charter.”
Board Committee Refreshment
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.
BOARD MEETING ATTENDANCE
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

CORPORATE GOVERNANCE AND BOARD MATTERS
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.
DIRECTOR NOMINATIONS
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.
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.
 
RITE AID CORPORATION   2022 Proxy Statement | 25

CORPORATE GOVERNANCE AND BOARD MATTERS
EXECUTIVE SESSIONS OF NON-MANAGEMENT DIRECTORS
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.
COMMUNICATIONS WITH THE BOARD OF DIRECTORS
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 such correspondence should be sent to:
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Rite Aid Corporation
c/o Corporate Secretary
30 Hunter Lane
Camp Hill, Pennsylvania 17011
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.
ENVIRONMENTAL, SOCIAL & GOVERNANCE MATTERS
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.
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Further information about our commitment to sustainability is available on our website under the headings “Corporate—Investor Relations—Sustainability.” Website content is not incorporated into this proxy statement.
 
26 | RITE AID CORPORATION   2022 Proxy Statement

CORPORATE GOVERNANCE AND BOARD MATTERS
CORPORATE GOVERNANCE MATERIALS
Website Access to Corporate Governance Materials
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Our corporate governance information and materials are posted on our website at riteaid.com/corporate/governance. Website content is not incorporated into this proxy statement.

CORPORATE GOVERNANCE GUIDELINES

AUDIT COMMITTEE CHARTER

COMPENSATION COMMITTEE CHARTER

EXECUTIVE COMMITTEE
CHARTER

NOMINATING AND GOVERNANCE COMMITTEE CHARTER

CODE OF ETHICS FOR THE CEO AND SENIOR FINANCIAL OFFICERS

CODE OF ETHICS AND BUSINESS CONDUCT

STOCK OWNERSHIP GUIDELINES

RELATED PERSON TRANSACTION POLICY

INSIDER TRADING
POLICY

CERTIFICATE OF
INCORPORATION

BY-LAWS OF RITE AID
CORPORATION

BOARD REPORT ON OPIOIDS OVERSIGHT

NYSE DOCUMENTS—ANNUAL CEO CERTIFICATION

NYSE DOCUMENTS—SECTION 303A WRITTEN AFFIRMATIONS OF COMPLIANCE
These documents are also available in print upon request, free of charge, by writing to:
[MISSING IMAGE: tm217739d1_ic-mailpn.jpg]
Rite Aid Corporation
Attention: Corporate Secretary
30 Hunter Lane
Camp Hill, Pennsylvania 17011
The Board regularly reviews corporate governance developments and will modify these materials and practices from time to time as warranted.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Review and Approval of Related Person Transactions
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

CORPORATE GOVERNANCE AND BOARD MATTERS
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.
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A copy of our full policy concerning transactions with related persons is available on the Governance section of our website at www.riteaid.com under the headings “Corporate—Governance—Our Policies—Related Person Transactions.” Website content is not incorporated into this proxy statement.
Related Person Transactions
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 $250,000 in fiscal year 2022 for certain opioid litigation-related matters. These legal services provided to Rite Aid on an arm’s length basis. Mr. Gilbert did not have a role in the decision regarding the retention of Bradley Arant, which pre-dates Mr. Gilbert becoming an associate and executive officer of Rite Aid. The Nominating and Governance Committee has reviewed the Company’s ongoing relationship with Bradley Arant to ensure that it remains in the best interests of the Company. Further, prior to December 31, 2021, the Company transitioned that work to other law firms that results in related persons not having a material interest in this work.
DIRECTORS’ COMPENSATION
Non-Management Director Service
Annual Cash Retainer
($)(1)
Annual Stock Award
($)
Non-management director 100,000 160,000
Additional annual retainers, for service as:
Chair of the Board
165,000
Committee Chairs

Audit Committee
25,000

Compensation Committee
20,000

Nominating and Governance Committee
25,000
Audit Committee Member (other than the Chair)
10,000
(1)
Fees payable quarterly in arrears.
 
28 | RITE AID CORPORATION   2022 Proxy Statement

CORPORATE GOVERNANCE AND BOARD MATTERS
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 $160,000 (with the number of shares subject to the grant calculated by dividing 160,000 by the closing price of our common stock on the date of grant, rounded to the nearest whole share).
The annual award of restricted stock units for fiscal year 2022 vested on the date of grant and the shares subject to the grant will become payable on a deferred basis upon the separation from service of the director.
A non-management director may also defer cash fees under the Rite Aid Corporation Director Deferred Compensation Plan established by the Company for compensation earned on or after January 1, 2021. Cash fees deferred are allocated to a bookkeeping account for the non-management director and notionally invested in accordance with the director’s election among a subset of investment funds available under the Company’s 401(k) savings plan. A non-management director’s deferral is paid on the director’s separation from service in a single lump sum. For fiscal year 2022, solely Ms. Harlam elected to participate in the Director Deferred Compensation Plan. One hundred percent of Ms. Harlam’s cash fees in respect of fiscal year 2022 were deferred until separation from service pursuant to the plan.
Directors who are officers and/or Rite Aid associates receive no separate compensation for service as directors or committee members. Directors are reimbursed for travel and lodging expenses associated with attending Board of Directors and Board committee meetings.
Non-management directors are subject to our Stock Ownership Guidelines discussed in the Compensation Discussion and Analysis under the caption “Director and Officer Stock Ownership Guidelines.”
Director Compensation Table for Fiscal Year 2022
The following Director Compensation Table sets forth fees, awards, and other compensation paid to or earned by our non-management directors who served during the fiscal year ended February 26, 2022:
Name
Fees Earned
or Paid in
Cash
($)
Stock
Awards
($)(1),(2)
Option
Awards
($)
Non-Equity
Incentive
Plan
Compensation
($)
Change In
Nonqualified
Deferred
Compensation
($)
All Other
Compensation
($)
Total
($)
Bruce G. Bodaken 232,500 159,998 392,498
Elizabeth “Busy” Burr 110,000 159,998 269,998
Bari Harlam 100,000 159,998 259,998
Robert E. Knowling, Jr. 105,384 159,998 265,382
Kevin E. Lofton 117,500 159,998 277,498
Louis P. Miramontes 122,500 159,998 282,498
Arun Nayar 110,000 159,998 269,998
Kate B. Quinn 109,658 159,998 269,656
(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

CORPORATE GOVERNANCE AND BOARD MATTERS
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.
 
30 | RITE AID CORPORATION   2022 Proxy Statement

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PROPOSAL 2—RATIFICATION OF THE
APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
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.
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The Board of Directors unanimously recommends that you vote FOR the ratification of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for fiscal year 2023.
AUDITOR FEES
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.
Year Ended
Fee Category
February 26, 2022
($ millions)
February 27, 2021
($ millions)
Audit fees(1) 2.3 2.4
Audit-related fees(2) 0.2 0.2
Tax fees(3)
All other fees
Total fees
2.5
2.6
(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.
(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.
(3)
Tax fees. Represents fees for tax compliance advice and planning.
AUDIT COMMITTEE REPORT
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

PROPOSAL 2—RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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.

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

Reviewed and updated the Audit Committee charter.

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.

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.

Pre-approved audit, other audit-related and tax services performed by our independent registered public accounting firm.
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.
THE AUDIT COMMITTEE
Louis P. Miramontes, Chair
Elizabeth Burr
Arun Nayar
 
32 | RITE AID CORPORATION   2022 Proxy Statement

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PROPOSAL 3—ADVISORY VOTE ON THE
COMPENSATION OF OUR NAMED EXECUTIVE
OFFICERS
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.
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.
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The Board of Directors unanimously recommends that you vote FOR the approval of the compensation of its named executive officers, as disclosed in this proxy statement.
 
RITE AID CORPORATION   2022 Proxy Statement | 33

 
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EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
CD&A Contents
Letter from the Chair of Our Compensation Committee
Introduction
Executive Summary
37
37
38
38
39
39
41
41
42
42
Objectives of Our Executive Compensation Program
Compensation Committee’s Processes
Peer Group and Competitive Pay
46 Components of Executive Compensation for Fiscal Year 2022
47
47
51
52
52
54
54
56
56 Post-Employment and Change in Control Benefits
56 Other Benefits
56 Deductibility Cap on Executive Compensation
57 Policy Regarding Recoupment of Certain Compensation (“Clawback”)
57 Prohibition on Margin Accounts and Hedging and Similar Transactions
57 Director and Officer Stock Ownership Guidelines
 
34 | RITE AID CORPORATION   2022 Proxy Statement

EXECUTIVE COMPENSATION
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Letter from the Chair of Our Compensation Committee
DEAR FELLOW STOCKHOLDERS:
On behalf of the Compensation Committee of the Board of Directors of Rite Aid, I would like to share with you the Committee’s perspective on our fiscal year 2022 performance, the alignment of our executive team’s compensation with the interests of Rite Aid stockholders, our stockholder engagement efforts, and the disclosure of our DEI initiatives.
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Fiscal Year 2022 Performance
During fiscal year 2022, Rite Aid associates continued to support our communities during the pandemic while also making progress on our strategic goals. The leadership team, in particular, has continued to move with urgency to execute the Company’s pharmacy services strategy and transform Rite Aid into a leading pharmacy services company.
We are pleased to announce that members of management were able to deliver on our financial goals intended to drive Rite Aid’s business plan. Some key financial achievements for the fiscal year include:

Achievement of Adjusted EBITDA of $506 million, an improvement of $68 million or 16% over the prior year results. See Appendix A for a reconciliation of our Adjusted EBITDA, which is a non-GAAP measure, to net income under GAAP

Revenue growth of $525 million to $24.6 billion, driven by an 8.7% increase in 30 day adjusted same store prescriptions filled

Ended the year with liquidity of $1.9 billion

Reduced net debt by $212 million, which improved our leverage Ratio year over year from 6.7 to 5.4

Fulfillment of 14.38 million COVID-19 vaccines and providing over 3.6 million COVID-19 PCR tests

Entered into a comprehensive rebate aggregation agreement, which will enable us to expand gross margin at Elixir and position us to be more competitive in the marketplace

Commencement of a program to right size our cost structure, which includes the announcement of the closure of 129 unprofitable stores

Took further steps to extend maturities, including the amendment of our senior secured credit facility, and received upgrades of our Corporate Credit Rating from both Moody’s and Standard and Poor’s
Compensation Program
Our compensation program is designed to align senior leaders with the goal of creating value for our stockholders and other stakeholders by growing our Rite Aid, Elixir and Health Dialog customer base and by offering enhanced services, products and solutions. To drive these operational and financial outcomes, for fiscal year 2022, the Compensation Committee worked with management to determine the appropriate mix of risk and reward for the short- and long-term incentive plans. The short-term incentive plan awards were based on three different metrics to deliver the right balance between the growth and cost containment goals for the organization: Adjusted EBITDA, Free Cash Flow and Total Revenue. Performance relative to these goals resulted in short-term incentive plan payouts of 96% of target award opportunities for fiscal year 2022. For the long-term incentive plan, our executives received a combination of time-vested restricted stock (45%) and performance stock units (55%), which vest over a three-year period based on meeting specified growth and debt repayment performance goals measured though the leverage ratio, cumulative revenue and cumulative scripts. To ensure the long-term health of the organization, we believe our growth opportunities must be balanced and we must pay down our debt and improve our leverage ratio over the next three years.
RITE AID CORPORATION   2022 Proxy Statement | 35

EXECUTIVE COMPENSATION
Stockholder Outreach
We strive to create an appropriate compensation program to align senior leaders with the goal of creating value for our stockholders and other stakeholders by growing our Rite Aid and Elixir customer base and by offering improved services, products and solutions. These past few years have been a journey, as we have reached out to our stockholders and other stakeholders to understand their perspectives on our pay programs, and we have used their feedback to further align our pay programs with their interests. The changes we made to our pay program in response to stockholder feedback were an important factor in the significant stockholder support we received for our say-on-pay resolution last year.
The company employs an active outreach plan to understand stockholder perspectives. Our contact with stockholders occurs on a continuous basis, with calls and meetings happening throughout the year. Additionally, in fiscal year 2022, we proactively offered 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. We will continue to offer access on a bi-annual basis with an additional outreach to top holders after the filing of this Proxy Statement.
The company also has many productive conversations with stockholders throughout the year, through attendance at investor conferences, participation in non-deal roadshows, and in other conversations. During fiscal year 2022, the most widely discussed issues included:

The impact of COVID-19 vaccines and testing on our business,

State of operations at Elixir and initiatives to grow the business,

Labor and product shortages, due in part to the pandemic, and the impact of those shortages on our ability to serve our customers,

Debt reduction and capital structure,

Price inflation,

Capital expenditures, and

The state of the business post-pandemic and go-forward strategies to grow revenue, Adjusted EBITDA and stockholder value.
We will continue to engage with interested stockholders who respond to our outreach to gather feedback on governance, executive pay, and our commitment to ESG and DEI. This outreach is our standard practice, and the Compensation Committee considers the feedback from these sessions as valuable input in making executive compensation decisions.
Disclosure of DEI Initiatives
The Compensation Committee oversees our DEI strategy. This year, we were pleased to approve a three-year DEI strategy roadmap and execute on several key components of that strategy. To build meaningful and lasting change, we must engage the unique perspectives, experiences and approaches that 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. We are being intentional in bringing to life our DEI Commitment Statement which aligns with our values so that our associates know what behaviors we expect them to demonstrate, and allows our customers, shareholders and other key stakeholders understand our aspirations.
Our new DEI strategy roadmap will help us advance further on our DEI journey. It includes the integration of DEI into human resource policies and business processes to create measurable and sustainable improvements. We are also emphasizing talent acquisition, development and management processes to grow a pipeline for future leaders with unique perspectives, experiences and approaches.
 
36 | RITE AID CORPORATION   2022 Proxy Statement

EXECUTIVE COMPENSATION
In Closing
The Compensation Committee remains committed to developing pay programs that drive business results and align with stockholder interests. We appreciate your continued feedback and support.
Sincerely,
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Katherine “Kate” B. Quinn
Compensation Committee Chair
Introduction
We encourage you to read this Compensation Discussion and Analysis for a detailed discussion and analysis of our fiscal year 2022 executive compensation program for the individuals named below. We refer to these individuals throughout this Compensation Discussion and Analysis and the accompanying tables as our “Named Executive Officers” or “NEOs.”
Heyward Donigan
Paul D. Gilbert
Matthew Schroeder
President and Chief Executive Officer (“CEO”)
Executive Vice President, Chief Legal Officer & Secretary
Executive Vice President, Chief Financial Officer (“CFO”)
James J. Peters3
Jocelyn Z. Konrad3
Former Chief Operating Officer
(“COO”)
Former Executive Vice
President, Chief Pharmacy
Officer
Executive Summary
Our Company
Rite Aid Corporation is on the front lines of delivering health care services and retail products to over one million Americans daily. Our pharmacists are uniquely positioned to engage with customers and improve their health outcomes. In fiscal year 2022, we provided an array of whole being health products and services for the entire family through over 2,400 retail pharmacy locations across 17 states. Through Elixir, our pharmacy services company, we provided access to life saving and life enhancing prescriptions, and we managed pharmacy benefits, pharmacy costs and healthcare outcomes for over three million members nationwide, on average per month, during fiscal year 2022.
Leadership Team Growth and Strategy Execution
The leadership team has continued to move with urgency to execute the Company’s strategy and transform Rite Aid into a leading pharmacy services company. In fiscal year 2022, the Company expanded its digital marketplace, added a national “buy online pick up in store” program, expanded home delivery nationwide, and completed the refreshment of store exteriors. The battle against the COVID-19 pandemic showed the world the importance of the Company’s plans to elevate the role of pharmacists. These trusted and accessible health care experts have proven essential in our communities by administering COVID-19 tests and vaccines, while also supporting customers with whole health advice as certified integrated pharmacy specialists.
3
Mr. Peters and Ms. Konrad departed the Company after the end of the 2022 fiscal year on March 7, 2022.
 
RITE AID CORPORATION   2022 Proxy Statement | 37

EXECUTIVE COMPENSATION
At Elixir, our full-service PBM, we entered into an agreement with Prime Therapeutics to drive improved rebate economics for our customers, which is an important step in enhancing Elixir’s competitive position in the marketplace. Elixir has been purposely built and owns all the assets needed to optimize the full pharmacy care experience, including:

An industry leading adjudication platform, offering flexibility, efficiency and data privacy protection;

Accredited mail and specialty pharmacies, creating an exceptional member experience, waste reduction and cost savings; and

Prescription discount programs for uninsured and under-insured and Medicare Part D plans for individuals, associations and groups.
Elixir’s accreditation demonstrates that it is delivering excellent quality results for our customers. Elixir has received a specialty pharmacy certification from Accreditation Commission for Health Care (ACHC) and accreditation for digital pharmacy by National Association of Boards of Pharmacy (NABP). Elixir was one of only two PBMs to earn all four core PBM accreditations by the Utilization Review Accreditation Commission (URAC): Pharmacy Benefit Management, Drug Therapy Management, Specialty Pharmacy and Mail Service and one of only three PBMs to hold the Health Information Products Certification for Pharmacy Benefit Information and Utilization Management from National Committee for Quality Assurance (NCQA). Elixir has also shown strong results in medical cost avoidance by driving improved medication adherence. Our Specialty Pharmacy’s net promotor score is 82, which is eight points higher than the national average. Finally, strong growth at our Elixir Savings showcases the continued need of cash card businesses to grow using our state of the art platform and analytics.
Our Response to COVID-19
In the face of the unprecedented COVID-19 pandemic, Rite Aid has been on the front lines of health care delivery in many of the hardest-hit cities across America. We were proud to participate in the White House COVID-19 Response Working Group and help significantly expand the nation’s self-swab testing capacity and 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 in underserved areas.
Throughout the pandemic, our associates proved their abilities 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.
Stockholder Vote on Executive Compensation and Stockholder Engagement
At our 2021 Annual Meeting, the Board and Compensation Committee were pleased with the improvement in our say on pay vote result, with approximately 82.7% of stockholders voting in favor of the compensation of our NEOs. We feel this improvement was a direct result of the significant focus we put on our stockholder outreach. In fiscal year 2022, we continued the same rigor to address any stockholder feedback we received through our scheduled outreach and any stockholder meetings we had during the ordinary course of business. We will continue to engage with stockholders to understand their concerns.
During the 2022 fiscal year, we reached out to more than 30 of our largest stockholders, holding approximately 50% of our stock to gather feedback on our pay and governance policies and practices. Our meetings were conducted virtually through online video conferencing or teleconference due to COVID-19 pandemic restrictions.
We are pleased that the feedback that we received from stockholders reinforced the actions we have taken over the past couple of years. With stockholder input in mind, the Company has continued with the commitments and changes which began in fiscal year 2021 and were continued in fiscal year 2022, including:

Diversified financial metrics between our annual bonus and our three-year long term incentive plans,

Revised the metrics in the annual incentive plan to focus on growing revenue and shareholder value, with Adjusted Scripts replaced by Total Revenue for fiscal year 2022,
 
38 | RITE AID CORPORATION   2022 Proxy Statement

EXECUTIVE COMPENSATION

Developed three-year DEI strategy roadmap and began execution on initial initiatives, and

Continued stockholder outreach.
The Compensation Committee will continue to review the results of future advisory say on pay votes and consider stockholder concerns in NEO compensation decisions and governance practices.
Future Stockholder Engagement Efforts
The Company intends to engage with stockholders in fiscal year 2023, as follows:
Year-Round Efforts

Solicit feedback and seek to understand investor perspectives on issues of importance to them

Hold quarterly earnings calls

Monitor investor relations website and other related correspondence

Attend analyst conferences and participate in meetings with current stockholders and potential investors

Hold a call with management specifically targeted toward retail shareholders

Communicate company strategy and progress on various retail shareholder forums

Update our investor relations website
Late Spring / Early Summer Efforts

Communicate pay decisions and changes to our pay program to our stockholders through our annual report and proxy statement

Extend first biannual invitation to our largest stockholders (together constituting holders of at least 40% or more of our outstanding shares of common stock) to discuss matters to be voted on at our upcoming annual meeting of stockholders

Discuss with stockholders topics of interest such as company performance, executive compensation, governance, DEI and ESG
Late Summer / Early Fall Efforts

Evaluate results of stockholder voting including our annual say on pay proposal and proxy advisor recommendations to establish the priorities for our stockholder engagement and to ensure that any significant concerns are identified and addressed

Assess results and review recommendations based on the Company’s strategic priorities
Late Fall / Early Winter Efforts

Review stockholder and proxy advisory policy changes and recent feedback to identify common concerns and themes
Late Winter / Early Spring Efforts

Respond to stockholder feedback or concerns and evolving practices by modifying our programs or enhancing our disclosure as appropriate

Extend second biannual invitation to discuss current concerns with our largest stockholders (together constituting holders of at least 40% or more of our outstanding shares of common stock)
2022 Fiscal Year Key Business Highlights
In fiscal year 2022, Rite Aid continued to position the Company for future growth, particularly as we moved to a post-COVID environment. The company’s strategy continued to evolve as we concentrated on the progression
 
RITE AID CORPORATION   2022 Proxy Statement | 39

EXECUTIVE COMPENSATION
at Elixir, unlocking the value of our pharmacists, and the renewal of our retail and digital experience. Thanks to the hard work and dedication of our retail pharmacists, the Company was able to handle the increased volumes attributed to COVID-19 vaccines and testing. Our pharmacists administered 3.6 million COVID-19 tests and 14.4 million COVID-19 vaccines as part of their dedication to the communities we serve. In addition, Elixir announced an agreement with a new national rebate aggregation partner to drive improved value and formalized their go-to-market strategy for the 2023 calendar selling season. The combination of these initiatives has given Elixir 34,000 early win lives and a finalist rate up 14% over last year. “Lives” refers to the number of people covered by Elixir’s pharmacy benefit management. Elixir has also shown strong results in medical cost avoidance by driving improved medication adherence. Our Specialty Pharmacy’s net promotor score is 82, which is eight points higher than the national average. Finally, strong growth at our Elixir Savings showcases the continued need of cash card businesses to grow using our state of the art platform and analytics.
On the digital side, express delivery transactions grew 900%, marketplace and delivery business grew 253%, and digital revenue grew 75% verses fiscal year 2021. These accomplishments helped Rite Aid achieve an Adjusted EDITDA of $506 million, a $68 million or 16% improvement over last year. The Company also saw revenue grow $525 million, reduced debt by $212 million, strengthened its balance sheet by paying off the remainder of its 6.125% 2023 bonds, extended its Senior Credit Facility, and executed on a number of sale leaseback opportunities to generate cash and further reduce debt. Standard and Poor’s and Moody’s took notice of Rite Aid’s efforts by upgrading its credit ratings. The Company also ended fiscal year 2022 with $1.9 billion in liquidity and a leverage ratio of 5.4x, down from 6.7 at the end of fiscal year 2021.
Below are the details related to key financial indicators used as performance measures in our incentive programs for fiscal year 2022:
Adjusted EBITDA:
Free Cash Flow:

Our Adjusted EBITDA from continuing operations for fiscal 2022 was $505.9 million or 2.1 percent of revenues, compared to $437.7 million or 1.8 percent of revenues for fiscal year 2021.

The increase in Adjusted EBITDA from continuing operations was due primarily to an increase of $112.7 million in the Retail Pharmacy segment partially offset by a decrease of $44.5 million in the Pharmacy Services segment.

The increase in the Retail Pharmacy Segment Adjusted EBITDA was driven by increased gross profit, partially offset by an increase in SG&A expenses. Gross profit benefitted from higher pharmacy same store sales, including immunizations, and incremental gross profit from our Bartell stores. These increases were partially offset by pharmacy reimbursement rate pressures. SG&A expenses were negatively impacted by cycling the benefit from the prior year change to modernize our associate PTO plans, incremental costs from our Bartell stores, and costs incurred to support our COVID-19 vaccination program, partially offset by labor savings due to the cycling of the prior year’s Hero Pay and Hero Bonus programs and the COVID-19 buying surge.

The decrease in the Pharmacy Services Segment Adjusted EBITDA was due to a decrease in gross profit impacted from the decline in revenues, a reduction in rebates, an increase in the medical loss ratio at Elixir Insurance, and the decision to exit the rebate aggregation business.

Our Free Cash Flow performance for the Rite Aid annual bonus plan calculation for fiscal year 2022 was $188 million. The Free Cash Flow calculation for the purpose of our compensation metrics included elements of free cash flow that the management team has some level of control over (Adjusted EBITDA plus or minus the change in inventory less capital expenditures). As a result of this specific definition for the bonus calculation, the Company did not achieve the $188 million target due to an unexpected increase in pharmacy inventory of $76 million.

Capital expenditures were $221 million as we continued to invest in store renovations, prescription file buys and information technology initiatives.
Total Revenue:

Total Revenue for fiscal year 2022 was $24,568 million, compared to $24,043 million for fiscal year 2021.

The increase in total Revenue was due primarily to an increase of $1,130 million in the Retail Pharmacy Segment, partially offset by a decrease of $647 million in the Pharmacy Services Segment.

The increase in the Retail Pharmacy Segment revenue was driven by an increase in same store sales and incremental sales from our Bartell stores.

The decrease in the Pharmacy Services Segment revenue was driven by a planned decrease in Elixir Insurance membership and a previously announced client loss due to industry consolidation.
See Appendix A for a reconciliation of our Adjusted EBITDA, which is a non-GAAP measure, to net income under GAAP.
 
40 | RITE AID CORPORATION   2022 Proxy Statement

EXECUTIVE COMPENSATION
Our Executive Compensation Philosophy
We believe strongly that pay should align with performance, and this focus is reflected in our executive compensation program. We seek to provide our NEOs with opportunities to earn total direct compensation (base salary, annual incentives, and long-term incentives) that is generally comparable to compensation levels provided to peer company executives and executives within other similarly-sized retailers and health services companies more broadly. Because of our desire to reinforce a performance-based culture, the Company emphasizes a compensation mix that is comprised primarily of variable pay. As a result, base salary makes up the smallest portion of total direct compensation for the NEOs, with variable pay in the form of annual and long-term incentives comprising the largest portion. The compensation mix varies by position, taking into account each position’s ability to influence Company results, as well as competitive practice.
Pay Mix
Our executive compensation program aims to appropriately balance the mix of cash and equity compensation, the mix of currently-paid and longer-term compensation, and the security of base benefits in a way that best furthers the compensation objectives discussed above. However, based on share usage constraints over the past few years, the mix of pay for our top executives has necessarily been weighted less toward equity compensation than is typical of our peers. Commencing in fiscal year 2021, we increased the relative weighting of the equity portion of executives’ target total remuneration opportunities to ensure greater alignment with stockholder interests and promote the retention of key new executive talent. Those equity opportunities consist of both performance-based equity that rewards executives based on Rite Aid’s financial achievements, and time-vested equity to promote the retention of critical executive talent and appropriately enhance current ownership levels.
To allow the Company to provide an appropriate level of variable, performance-based long-term equity compensation in the future, and the appropriate weighting of equity-based compensation for Rite Aid leadership, we have submitted a proposal for consideration by our stockholders to increase the share reserve under the Rite Aid Corporation Amended and Restated 2020 Omnibus Equity Plan. See Proposal 4 “Approval of an Amendment to the Rite Aid Corporation Amended and Restated Omnibus Equity Incentive Plan” in this proxy statement.
The charts below show the overall mix of base salary, target annual incentives, and target long-term incentives for fiscal year 2022 for our NEOs: Ms. Donigan, Messrs. Peters and Schroeder, Ms. Konrad and Mr. Gilbert. The majority of our NEOs’ target total direct compensation opportunity in fiscal year 2022 was provided in the form of performance-based compensation (variable pay), 89% for Ms. Donigan and 76% on average for our other NEOs serving at the end of the prior fiscal year.
Total Target Compensation
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EXECUTIVE COMPENSATION
Compensation Governance and Best Practices
The table below summarizes compensation governance and best practices Rite Aid follows.
WHAT WE DO
WHAT WE DO NOT DO
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Conduct annual stockholder advisory vote on the compensation of our named executive officers
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Maintain dialogue with stockholders on various topics, including executive pay practices
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Retain an independent executive compensation consultant to the Compensation Committee
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Ensure that a significant portion of executive officer total target remuneration is at risk
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Provide annual and long-term incentive plans with performance targets aligned to business goals
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Require a designated level of stock ownership for all named executive officers and non-management directors
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Require shares subject to the annual non-management director grant to be deferred until separation from service
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Require equity awards to have a double trigger (qualifying termination of employment and change in control)
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Complete an annual incentive compensation risk assessment
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Maintain a formal clawback policy for executive officers
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Provide gross-up payments to cover personal income taxes or excise taxes related to executive severance benefits.
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Permit executives to engage in hedging or pledging of Rite Aid securities
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Reward executives for imprudent, inappropriate, or unnecessary risk-taking
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Allow the repricing of equity awards without stockholder approval
Our Fiscal Year 2022 Pay Decisions
In establishing performance measures for our fiscal year 2022 incentive programs, we diversified our financial metrics between our annual bonus and our three-year long-term incentive plans, in part in response to stockholder feedback.
Annual bonus plan. The Rite Aid annual bonus plan metrics were Adjusted EBITDA (60%); Free Cash Flow (20%) and Total Revenue (20%).
For fiscal year 2022, Rite Aid’s bonus plan established an Adjusted EBITDA threshold of $441.0 million, a Free Cash Flow threshold of $247 million, and a Total Revenue threshold of $23,051 million. The Free Cash Flow calculation for the purpose of our compensation metrics included elements of free cash flow that the management team has some level of control over (Adjusted EBITDA plus or minus the change in inventory less capital expenditures).
Our Adjusted EBITDA performance for the Rite Aid annual bonus plan calculation for fiscal year 2022 was $506 million, which was above our target of $490.0 million; Free Cash Flow was $188 million, which was below the threshold performance of $247.0 million due to an unexpected increase in pharmacy inventory of $76 million; and Total Revenue was $24,568 million, which was below our target of $25,613 million and above the threshold of $23,051 million.
The table below illustrates the performance targets that were set under the annual bonus plan and the actual performance against such targets in fiscal year 2022.
Performance Level
Weighting
Threshold
(50%)
Target
(100%)
Maximum
(200%)
Actual
Performance
% of Weighted
Target
Attainment
Adjusted EBITDA (millions) 60% $ 441 $ 490 $ 539 $ 506 80%
Free Cash Flow (millions) 20% $ 247 $ 290 $ 319 $ 188 0%
Total Revenue 20% $ 23,051 $ 25,613 $ 28,174 $ 24,570 16%
Total Resulting Payout 96%
 
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EXECUTIVE COMPENSATION
Long-term incentive plan. The Compensation Committee structured the Long-Term Incentive Plan to include grants in the form of 45% restricted stock and 55% share-settled performance units for our Named Executive Officers. The restricted stock grants will vest ratable in 1/3 increments over three years, based on continued employment. The performance units cliff vest after three years based on meeting performance goals measured at the end of the performance period. The performance units are conditioned on performance against three performance metrics: Leverage Ratio (34%); Cumulative Revenue (33%); and Cumulative Scripts (33%). These metrics are distinct from the metrics for Rite Aid’s annual bonus plan.
The performance units are further subject to modification based on whether three-year relative stockholder return versus the Russell 3000 Index was positive or negative measured at the end of the performance period. See “Long-Term Incentive Program—Performance Awards.” For the fiscal year 2022 and beyond, the Compensation Committee believes that it is increasingly critical to ensure that the executive team is properly aligned with stockholder interests. For that purpose, we will leverage the equity plan we are asking stockholders to approve at the Annual Meeting. We aim to utilize the equity plan to deliver an increasing proportion of target total compensation opportunities in the form of increased performance-based equity that rewards executives based on Rite Aid’s financial achievements, in proportion to the time-vested equity that will promote the retention of critical executive talent and appropriately build current ownership levels.
Fiscal Year 2022 CEO Pay for Performance. Our CEO’s pay increased 4% year over year from fiscal 2021 to fiscal 2022, from $9.6 million to $9.9 million. This was primarily due to an increase in Ms. Donigan’ s base salary to maintain market competitiveness as her pay was significantly below median for the position.
Despite the ongoing effects of the pandemic in fiscal year 2022, Rite Aid continued to move forward and execute on its strategies. We continued expanding our pharmacist’s roles in serving our communities, moved Elixir forward to better compete in the marketplace, and greatly expanded our digital offerings. Some of our other achievements under Ms. Donigan’s leadership in fiscal 2022, included:

Further demonstrated the value of the pharmacy by administering 14.38 million COVID-19 vaccines and 3.62 million COVID-19 tests

Achieved an Adjusted EBITDA of $506 million, an improvement of $68 million or 16% over the prior year results

Entered into a comprehensive rebate aggregation agreement which will enable us to expand gross margin at Elixir and position us to be more competitive in the marketplace

Commenced a program to right size our cost structure, which included the decision to close 129 unprofitable stores

Strengthened our balance sheet by refinancing and extending our Senior Credit Facility and repaying the remainder of our 6.125% 2023 bonds

Received upgrades of our Corporate Credit Rating from both Moody’s and Standard and Poor’s

Ended fiscal year 2022 with $1.9 billion in liquidity

Reduced leverage ratio down to 5.4 from 6.7 in fiscal year 2021
The 96% payout under the annual incentive plan was based on achieving above target results of Adjusted EBITDA, and above threshold results of Total Revenue. The Free Cash Flow results were below threshold due to an unexpected increase in pharmacy inventory of $76 million and thus did not achieve payout level.
 
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EXECUTIVE COMPENSATION
Objectives of Our Executive Compensation Program
All of our executive compensation and executive benefits programs are within the purview of the Compensation Committee, which bases these programs on the same objectives that guide the Company in establishing all of its compensation programs. The Compensation Committee also administers the Company’s equity incentive compensation plans. In establishing or approving the compensation of our Named Executive Officers in any given year, the Compensation Committee is generally guided by the following objectives:

Compensation is based on the level of job responsibility, individual performance, and corporate performance, and fosters the long-term focus required for success in the pharmacy, health care services and retail health care industry. As associates progress to higher levels in the organization, an increasing proportion of their pay is linked to Company performance and stockholder returns and to longer-term performance because they are in a position to have greater influence on longer-term results.

Compensation reflects the value of the job in the marketplace. To attract and retain a highly skilled, diverse work force, we must remain competitive with the pay of other employers who compete with us for talent in the current, highly competitive market.

Compensation rewards performance. Our programs deliver compensation that is related to our corporate performance. Where corporate performance falls short of expectations, the programs deliver lower-tier compensation. In addition, the objectives of pay-for-performance and retention must be balanced. Even in periods of temporary downturns in overall corporate performance, the programs continue to ensure that successful, high-achieving associates will remain motivated and committed to the Company to support the stability and future needs of the Company.

To be effective, performance-based compensation programs enable associates to easily understand how their efforts can affect their pay, both directly through individual performance accomplishments and indirectly through contributing to the Company’s achievement of its strategic and operational goals.

Compensation programs reward performance relative to consistent measures and goals at all levels of the organization. While the programs and individual pay levels will always reflect differences in job responsibilities, geographies, and marketplace considerations, the overall structure of compensation and benefit programs are broadly similar across the organization.

Compensation and benefit programs attract and retain associates who are interested in being a part of the Rite Aid team.
Compensation Committee’s Processes
In making executive pay decisions, the Compensation Committee assesses Company performance and reviews competitive compensation levels at a peer group of companies to ensure the Company’s executive compensation program is achieving its objectives.
The Compensation Committee uses Company performance measures in two ways:

In assessing the linkage between actual total compensation and performance, the Compensation Committee considers various measures of Company and industry performance, such as comparable store sales and script count growth, pharmacy services segment revenue growth, EBITDA growth, debt leverage ratios, return on average invested capital and net assets, relevant strategic initiatives, and total stockholder return. In determining performance relative to the Company’s peer group (as discussed further below), the Compensation Committee does not apply a formula or assign these performance measures relative weights. Instead, it makes a subjective determination after considering such measures collectively.

The Compensation Committee has established specific Company target incentive/award levels and performance measures that determine the size of payouts under the Company’s two formula-based incentive programs—the annual cash incentive bonus program and long-term incentive program.
Peer Group and Competitive Pay
For fiscal year 2022, the Compensation Committee, with the help of its independent compensation consultant, Mercer, assessed the Company’s programs relative to a peer group of organizations and published survey data.
 
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Because the Company has a limited number of publicly-traded direct competitors and because pharmacy sales (which account for over two-thirds of the Company’s retail revenue) are governed by third-party contracts, we reviewed potential peers relative to multiple criteria including:

Industry: Retail, health care services/pharmacy, and pharmacy benefits management (adjacent industries with similar operating models and/or product mix were considered);

Business model characteristics: Health care services and pharmacy benefits management offerings, pharmacy retail, small ticket retail, and grocery/convenience store operating models, national presence (users and/or employees); and

Company size: Companies of similar size based on revenue (.25x to 4x the revenue of Rite Aid).
After reviewing potential peers relative to the criteria above, it was determined the peer group should be updated to better align with size based on revenue and to better reflect the industry of the company. Ten new companies were added and twelve were removed, taking the total number of peer companies from 16 to 14. The peer group approved in fiscal year 2022 includes the following companies:
Fiscal Year 2022 Peer Group(1)
Peer Company
Revenue
($ Millions)(1)
Centene Corporation(2) 95,748
Target Corporation(2) 88,621
Humana Inc.(2) 74,388
Albertsons Companies, Inc.(2) 69,355
Alimentation Couche-Tard Inc.(2) 46,657
Best Buy Co., Inc. 45,521
Dollar General Corporation 32,490
Molina Healthcare, Inc.(2) 17,657
AutoZone, Inc.(2) 12,993
Laboratory Corporation of America Holdings 12,442
Bed Bath & Beyond Inc. 9,721
DICK’S Sporting Goods, Inc.(2) 9,067
Ulta Beauty, Inc.(2) 6,259
Sprouts Farmers Market, Inc.(2) 6,232
75th Percentile 70,613
Median 25,073
25th Percentile 23,854
Rite Aid
23,854
Percentile Rank 49th
(1)
Represents financials as of 1/20/2021 from Standard & Poor’s Capital IQ.
(2)
Indicates a company added to the peer group in fiscal year 2022.
The Compensation Committee compares the compensation levels of Rite Aid’s NEOs to peer company compensation levels in the aggregate and compares the pay of individual executives if the jobs are sufficiently similar to make the comparison meaningful.
In addition to peer group data, the Compensation Committee reviews market data based on specific functional responsibility for each executive from published survey data. The survey analysis targets data from similarly sized
 
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EXECUTIVE COMPENSATION
retail organizations based on each executive’s functional responsibility. The surveys used in the analysis include Mercer’s 2021 Executive Remuneration Suite and Mercer’s 2021 Retail Compensation and Benefits Survey.
The Compensation Committee considers peer group and survey data to evaluate the degree to which the executive compensation program as a whole is competitive, and generally aims to establish target total direct compensation opportunities that are appropriately-aligned with the medians of these comparator groups. The incentive plans were designed so executives can earn above competitive pay levels for superior performance and below competitive pay levels if performance is below expectations. The Compensation Committee assesses overall alignment of the compensation program rather than benchmarking a specific target position with consideration of factors, such as Company and individual performance, how executive roles function within Rite Aid, concerns about executive retention, and competitive positioning of equity compensation. The Compensation Committee assesses Rite Aid’s performance relative to its peer group on both a one- and three-year basis and observed alignment of performance with actual total direct compensation levels for the executives in the aggregate.
The Compensation Committee retained Mercer, a wholly-owned subsidiary of Marsh & McLennan Companies, Inc. (“MMC”), as its independent compensation consultant for fiscal year 2022. Mercer’s fees for executive compensation consulting in fiscal year 2022 were $396,480. No other fees were paid by Rite Aid for other services provided by Mercer. Rite Aid management retained an MMC affiliate for risk management and business consulting services resulting in fees of approximately $1.6 million. The Compensation Committee conducted an independence assessment of Mercer, including considering the fees for other services provided by Mercer and its affiliates to the Company, consistent with NYSE listing standards, and concluded that the engagement of Mercer did not raise any conflicts of interest or similar concerns.
With respect to fiscal year 2022, Mercer reviewed recommendations and analysis prepared by management and provided advice and counsel to the Compensation Committee for the applicable periods during which they were engaged.
Total compensation review. The Compensation Committee reviews each named executive’s base pay, annual bonus, and long-term incentives annually with input from the Compensation Committee’s independent compensation consultant. Following the fiscal year 2022 review, the Compensation Committee determined base salary levels were not aligned with the market and increased base salaries as shown in the Base Salary chart below to remain competitive.
Components of Executive Compensation for Fiscal Year 2022
For fiscal year 2022, the regular compensation program for our Named Executive Officers consisted of four primary components: (i) base salary, (ii) a cash incentive bonus opportunity under the Company’s annual incentive bonus plan, (iii) long-term incentives consisting of restricted stock and performance-based units, and (iv) a benefits package, including retirement and welfare benefits (which are generally provided to all associates of Rite Aid on a non-discriminatory basis), and limited perquisites. A significant portion of total compensation under the fiscal year 2022 program is variable, meaning it is subject to meeting specified performance goals and is comprised of target annual incentives and target long-term incentives.
Our executive compensation program aims to appropriately balance the mix of cash and equity compensation, the mix of currently-paid and longer-term compensation, and the security of base benefits consistent with the compensation objectives discussed above. Share usage constraints over the past few years, has caused the mix of pay for our top executives to be weighted less toward equity compensation than is typical of our peers. For fiscal year 2022, we leveraged the equity plan stockholders approved at the 2021 Annual Meeting to increase the relative weighting of the equity portion of executives’ target total remuneration opportunities to ensure greater alignment with stockholder interests and promote the retention of key new executive talent. Our NEOs’ equity opportunities consist of both performance-based equity that rewards executives based on Rite Aid’s financial achievements, and time-vested equity that promotes retention of critical executive talent and enhances current ownership levels.
 
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EXECUTIVE COMPENSATION
Base Salary
Base salary is one element of an executive’s annual cash compensation and reflects the executive’s long-term performance, skill set, and the market value of that skill set. In setting base salaries for fiscal year 2022, the Compensation Committee considered the following factors:

Base salary levels at peer group companies to test for reasonableness and competitiveness; current competitive market for executive talent

Subjective judgment in view of the Company’s compensation objectives

Relative internal pay levels and pay equity

Individual performance

Promotions or increased responsibility

Overall pay mix

Preference towards increased performance-based pay
Consistent with our compensation objectives, as executives progress to higher levels in the organization, a greater proportion of overall compensation is directly linked to Company performance and stockholder returns. For example, Ms. Donigan’s target total direct compensation is more heavily weighted toward incentive compensation (89%) than that of the other Named Executive Officers (76% on average).
For 2022, the Compensation Committee reviewed the Named Executive Officers’ base salaries, considering the principles described above under “The Compensation Committee’s Processes.” The Compensation Committee determined that increases in base salary were necessary to reasonably maintain market competitiveness. Specifically, CEO and CFO base salaries were increased 15% to continue to bring them closer to market competitive levels in order to retain these key executives. However, their salaries remain below the peer group median. The table below details base salaries for our Named Executive Officers as of the end of fiscal year 2022 and describes the rationale for that base salary decision:
Executive
Base Salary at
End of FY 2021
Base Salary
at End of
FY 2022
Change from
Prior Fiscal
Year
Rationale
Heyward Donigan $ 1,000,000
$1,150,000
15%
To maintain market competitiveness;
significantly below median for the position
Matthew Schroeder $ 650,100
$748,000
15%
To maintain market competitiveness;
significantly below median for the position
Paul Gilbert $ 590,000
$602,000
2%
To maintain market competitiveness
James J. Peters $ 750,000
$825,000
10%
To maintain market competitiveness;
significantly below median for the position
Jocelyn Z. Konrad $ 600,000
$612,000
2%
To maintain market competitiveness
Annual Incentive Awards
The Company’s annual incentive plan is designed to be consistent with the goals of our executive compensation philosophy to drive performance and increase shareholder value and reward the NEOs for meeting the Company’s financial objectives. For each fiscal year, the Compensation Committee establishes a target percentage of salary for each participant at the beginning of the fiscal year and approves the financial goals required for the Company to pay an award. Payouts for the NEOs are based on the Company’s financial results for the year relative to the predetermined performance measures.
Annual Incentive Targets. Targets for each NEO were based on job responsibilities, internal relativity, and peer group and survey data. The Compensation Committee’s objective was to set bonus targets so total annual cash compensation (including base salary and annual incentive assuming a target payout) was generally aligned with the market with a substantial portion of that compensation linked to corporate performance. Consistent with our executive compensation philosophy, individuals with greater job responsibilities had a greater
 
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EXECUTIVE COMPENSATION
proportion of their total cash compensation tied to Company performance through the incentive plan. Under the plan formula, payouts can range from 0% to 200% of target depending on Company performance. The NEOs’ incentive targets did not increase in fiscal year 2022. The Compensation Committee established the following threshold, target and maximum payouts as a percentage of base salary for fiscal year 2022:
Annual Incentive Opportunity
Executive
Threshold Payout
(as a % of Salary)
Target Payout
(as a % of Salary)
Maximum Payout
(as a % of Salary)
Heyward Donigan 100% 200% 400%
Matthew Schroeder 50% 100% 200%
Paul Gilbert 37.5% 75% 150%
James J. Peters 62.5% 125% 250%
Jocelyn Z. Konrad 50% 100% 200%
Annual Incentive Plan Metrics. To drive appropriate performance through the Annual Incentive Plan and to continue to balance stockholders’ concerns that the plan should use more than a single performance metric, the Compensation Committee retained the Free Cash Flow and Adjusted EBITDA performance metrics. The Adjusted Pharmacy Script Comparable performance metric used in fiscal year 2021 was replaced with Total Revenue to focus on growing revenue and shareholder value. Fiscal year 2022 metrics and weightings were: 60% Adjusted EBITDA, 20% Free Cash Flow and 20% Total Revenue. This diversification of metrics and reduction of overlapping metrics between the annual and long-term incentive plans is intended to decrease the risks associated with placing too much emphasis on a single metric.
The target performance level for the Adjusted EBITDA target of $490 million for fiscal year 2022 was set below the fiscal year 2021 target of $520 million based on Rite Aid’s financial guidance for fiscal year 2022. However, it was set above the fiscal year 2021 actual performance of $440.2 million, which was lower than expected due to the difficulties presented by the COVID-19 global pandemic and its impact on the financial performance of the Company. These difficulties included prescription reimbursement rate challenges, the competitive environment in which the Company operates, and the variability around the timing of benefits from the Company’s RxEvolution strategic initiatives. The Compensation Committee also established a threshold at which management could be rewarded at 50% of bonus target at achievement of Adjusted EBITDA of $441 million (90% of the fiscal year 2022 target and above the fiscal year 2021 actual performance of $440.2 million), and a maximum at which management could be rewarded at 200% of bonus target at achievement of Adjusted EBITDA of $539 million (110% of the fiscal year 2022 target and significantly above the fiscal year 2021 target of $520 million). The performance goals were set at these levels so that the plan continues to motivate executives to achieve the Company’s short-term financial objectives and to support executive retention during these challenging times. Despite the many obstacles presented by COVID-19, the Company ultimately generated results that exceeded plan, which had a positive impact on our fiscal year 2022 performance. As a result, Rite Aid’s annual bonus plan calculated Consolidated Adjusted EBITDA was above target at $506 million.
Annual Incentive
Plan Metrics
Weighting
Description
Adjusted EBITDA
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Adjusted EBITDA is the most heavily weighted measure because it appropriately encourages the NEOs to focus on improving operating results which ultimately drive stockholder value. EBITDA growth has historically shown a strong positive correlation with three-year and five-year total stockholder return for Rite Aid and its peer group. The majority of Rite Aid’s peer companies use an EBITDA measure in their annual incentive plans. Based on Rite Aid’s current financial situation and capital structure, the Compensation Committee believes that Adjusted EBITDA is the best indicator of Rite Aid’s operating performance. The measure is tracked regularly and is clearly understood by the officers and they can impact the measure by taking actions to improve the operating performance of our stores. In addition, the Company regularly communicates Adjusted EBITDA to the investment community.
 
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EXECUTIVE COMPENSATION
Annual Incentive
Plan Metrics
Weighting
Description
The Compensation Committee established an Adjusted EBITDA performance target of $490 million for fiscal year 2022, based on the financial plan targets. Because of prescription reimbursement rate challenges, the competitive environment in which the Company operates, and th