J. Seth Estep
TRACTOR SUPPLY CO /DE/About J. Seth Estep
Executive Vice President and Chief Merchandising Officer at Tractor Supply Company since February 2020, responsible for merchandising strategy across pricing, private brands, global sourcing, visual presentation, space planning, and leading Fusion remodel and garden center initiatives. He previously served as SVP, General Merchandising (2017–2020) and has been with Tractor Supply since 2005 across marketing and merchandising roles; he holds a BBA from the University of Tennessee and an MBA in Finance from Belmont University; he also serves on the board of Leslie’s, Inc. (Compensation Committee Chair) . Company performance context: Tractor Supply delivered record sales of $14.9B in 2024 and over $1B in earnings, and its PSUs are tied to net sales and EPS with a relative TSR modifier (2022 PSU cycle paid at 30% of target; relative TSR percentile 68.41%, no modifier) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Tractor Supply Company | EVP, Chief Merchandising Officer | Feb 2020–present | Leads merchandising strategy, Fusion remodels, garden center expansion, private brands and pricing . |
| Tractor Supply Company | SVP, General Merchandising | Apr 2017–Feb 2020 | Drove category growth; member of Executive Committee since Jun 2019 . |
| Tractor Supply Company | VP, Divisional Merchandise Manager | 2014–2017 | Advanced merchandising execution and assortment; promoted from prior leadership roles . |
| Tractor Supply Company | Marketing; Merchandising roles | 2005–2007; 2008–2014 | Built CRM/marketing foundations; rejoined 2008 in merchandising roles of increasing responsibility . |
| BB&T Capital Markets | Equity Research Analyst | 2007–2008 | External sell-side experience in retail coverage . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Leslie’s, Inc. (NASDAQ: LESL) | Director; Chair, Compensation Committee; member, Nominating & Governance | Nov 2023–present | Appointed Nov 14, 2023; brings merchandising/pricing/private brands expertise . |
| Saddle Up! (non-profit) | President of the Board | As of Feb 2020 | Equine therapy non-profit leadership noted in TSC press release . |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary (earned) | $628,846 | $650,077 | $647,462 |
| Target Bonus (% of Salary) | 75% | 75% | 75% |
| Actual Bonus Paid (CIP) | $527,871 | $385,729 | $422,423 |
Performance Compensation
- Equity grants and vesting
- PSUs: Performance based on net sales and diluted EPS (50%/50%) with a relative TSR modifier of ±25%; cliff vest at 3 years .
- RSUs: Time-based, vest ratably over 3 years .
- Stock Options: 10-year term, vest ratably over 3 years; exercise price set at prior day close .
- 2022 PSU cycle settlement (for FY2024 performance): Company achieved $14.883B net sales and $2.04 diluted EPS (split-adjusted) vs targets; PSUs vested at 30% of target; Estep received 2,664 shares; relative TSR percentile 68.41% → no modifier .
| 2024 Equity Grants (Grant date: 2/5/2024) | Shares / Value | Terms |
|---|---|---|
| PSUs – Target (#) | 10,645 | Net sales & EPS metrics; TSR modifier ±25%; cliff vest at 3 years . |
| PSUs – Grant date fair value ($) | $499,953 | Target-level valuation . |
| RSUs – # of units | 5,590 | Ratable vest over 3 years . |
| RSUs – Grant date fair value ($) | $249,839 | . |
| Stock Options – # of options | 21,360 | Ratable vest over 3 years; 10-year term . |
| Stock Options – Exercise price ($/sh) | $46.59 | Set at prior day close . |
| 2023 Equity Grants (Grant date: 2/8/2023) | Shares / Value | Terms |
|---|---|---|
| PSUs – Target (#) | 1,682 | Net sales & EPS through FY2025; TSR modifier . |
| PSUs – Grant date fair value ($) | $399,986 | . |
| RSUs – # of units | 890 | 3-year ratable vest . |
| RSUs – Grant date fair value ($) | $199,970 | . |
| Stock Options – # of options | 3,283 | 3-year ratable vest; 10-year term . |
| Stock Options – Exercise price ($/sh) | $232.73 | Set at prior day close . |
2024 CIP metrics and payout mechanics (all NEOs, including Estep)
| Metric | Weight | Target | Actual | Component Payout |
|---|---|---|---|---|
| Net Income | 75% | $1.129–$1.152B | $1,101.240M | 86.4% of target for the net income portion |
| Lead with Legendary Service | 6.25% | Internal KPI targets | 96.0% of target | 6.0% weighted payout |
| Neighbor’s Club Value | 6.25% | KPI targets | 134.7% of target | 8.4% weighted payout |
| Accelerate Digital Experience | 6.25% | KPI targets | 119.2% of target | 7.4% weighted payout |
| Scale the Garden Center | 6.25% | KPI targets | 0.0% | 0.0% weighted payout |
| Total Strategic Initiatives | 25% | — | — | 21.8% total weighted payout |
Equity Ownership & Alignment
| Item (as of Mar 21, 2025) | Value / Detail |
|---|---|
| Beneficial ownership – common shares | 64,039 shares; <1% of class . |
| Option awards outstanding (per grant) | 2019: 35,825 exercisable ; 2020: 56,630 exercisable ; 2021: 59,745 exercisable ; 2022: 13,350 exercisable / 6,680 unexercisable ; 2023: 5,470 exercisable / 10,945 unexercisable ; 2024: 21,360 unexercisable . |
| Unvested RSUs (count; market value) | 5,590; $304,990 (at $54.56/sh) . |
| Outstanding PSUs (target; payout value) | 10,645; $580,791 (target, payout value basis) . |
| Ownership guidelines (EVP) | 3x base compensation; executives meet or are within compliance period . |
| Hedging/Pledging policy | Robust anti-hedging and anti-pledging policy; pledging prohibited . |
| Deferred compensation (2024) | Contribution $6,475; company match $4,500; year-end balance $11,991; withdrawals $(14,335) . |
Employment Terms
- Change-in-control agreement (non-CEO NEO form): Double-trigger required; severance equals 1.5x (base salary + target annual bonus) in cash, two years of estimated benefits paid in cash, prorated annual bonus at greater of target or projected performance, outplacement up to $40,000; equity (options, RSUs) fully vest; PSUs settle at target if performance period not completed (subject to award terms) .
- Potential change-in-control payouts for Estep (assuming 12/28/2024 trigger): Base salary $975,000; non-equity incentive $1,218,750; equity acceleration $2,832,685; health & welfare benefits $52,686; life insurance $4,464; outplacement $40,000; total $5,123,585 .
- Death/Disability equity settlement for Estep (12/28/2024 basis): $2,493,540 equity value .
- Non-compete/Non-solicit: Protective agreements tied to PSUs include an 18-month post-termination non-compete, non-solicit and non-disparagement for NEOs (24 months for CEO); breach forfeits PSUs .
- Clawback policy: Company will recover incentive comp over prior 3 fiscal years upon a required restatement impacting financial metrics .
- No excise tax gross-ups; payments may be reduced to the 280G safe harbor if beneficial after-tax .
Performance & Track Record
- FY2024 highlights under Estep’s remit: Focused assortment in consumable/usable/edible categories driving positive unit comps; margin growth via strategic pricing/promotion; expanded Fusion to ~50% of stores and garden centers to 550+ locations; led Localization initiative design . Prior years: outperformance in CUE categories and product margin delivery in challenging macro (FY2023); 13th consecutive year of positive comps and 70% three-year revenue growth through category expansion (FY2022) .
- Company-level context: Record FY2024 sales $14.9B and >$1B earnings, continuing momentum in omnichannel, loyalty and store growth .
Compensation Structure Analysis
- Strong pay-for-performance alignment: Short-term bonuses tied 75% to net income and 25% to strategic initiatives; long-term PSUs tied to net sales and EPS with a relative TSR modifier of ±25% .
- Equity-heavy mix: 2024 target LTI $1.0M split 50% PSUs, 25% RSUs, 25% options; multi-year vesting promotes retention .
- Governance safeguards: Robust clawback; anti-hedging/pledging; minimum vesting; no excise tax gross-ups; double-trigger CIC; annual say-on-pay receiving 93.0% approval at 2024 meeting .
Equity Ownership & Alignment Details
| Aspect | Assessment |
|---|---|
| Skin-in-the-game | Direct ownership (64,039 shares) plus sizable unvested RSUs/PSUs; stock ownership guideline of 3x salary applies and compliance is met or within period . |
| Pledging/Hedging | Prohibited for executives; reduces misalignment risk . |
| Vested vs unvested | Unvested RSUs (5,590) and PSUs (10,645) indicate retention hooks; options laddered across 2019–2024 with mix of exercisable/unexercisable . |
| Insider selling pressure | Options and vesting schedules create periodic liquidity, but anti-hedging/pledging mitigates risk; no Form 4 data assessed herein. |
Say-on-Pay & Peer Group
- Say-on-Pay: 93.0% approval at 2024 annual meeting .
- Compensation peer group: Advance Auto Parts, AutoZone, Best Buy, BJ’s, Burlington, Casey’s, Dick’s Sporting Goods, Dollar General, Dollar Tree, O’Reilly, Ross Stores, Ulta Beauty, Bath & Body Works .
Investment Implications
- Compensation alignment: High proportion of at-risk, multi-year equity tied to net sales/EPS and relative TSR should incentivize durable growth and margin discipline; governance features (clawback, no pledging, double-trigger CIC) reduce adverse incentives .
- Retention risk modest: Significant unvested RSUs/PSUs and 18-month non-compete reduce near-term flight risk; CIC protections are standard but not overly rich (1.5x cash) .
- Execution signals: Track record in consumables, localization, Fusion and garden centers supports merchandising-led growth; 2024 strategic initiative payouts show mixed execution (strong digital and loyalty, weak garden center KPI) to monitor .
- External roles: Leslie’s board service (Compensation Chair) expands network and governance experience; monitor potential time-commitment or interlocks (no direct retail conflict evident) .