Notice of 2024 Annual Meeting and 2023 Proxy Statement

Date and Time:

Wednesday, January 24, 2024

9:00 a.m., Eastern Time

Virtual Meeting

Participate online at

Access:

www.virtualshareholdermeeting.com/MSM2024

NOTICE OF 2024 ANNUAL MEETING OF SHAREHOLDERS

To the shareholders of MSC Industrial Direct Co., Inc.:

NOTICE IS HEREBY GIVEN that the 2024 Annual Meeting of Shareholders (the "Annual Meeting") of MSC Industrial Direct Co., Inc., a New York corporation, will be held at 9:00 a.m., Eastern Time, on Wednesday, January 24, 2024 via live audio webcast at www.virtualshareholdermeeting.com/MSM2024, for the following purposes, as more fully described in the accompanying Proxy Statement:

  1. To elect the eight directors nominated by the Board of Directors;
  2. To ratify the appointment of Ernst & Young LLP to serve as our independent registered public accounting firm for fiscal year 2024;
  3. To approve, on an advisory basis, the compensation of our named executive officers;
  4. To vote, on an advisory basis, on the frequency of future advisory votes to approve the compensation of our named executive officers; and
  5. To consider and act upon such other matters as may properly come before the Annual Meeting or any adjournment or postponement thereof.

The Board of Directors recommends that you vote (i) "FOR" Items 1, 2 and 3 and (ii) in favor of a frequency of every "1 YEAR" for Item 4. The proxy holders will use their discretion to vote on other matters that may properly come before the Annual Meeting or any adjournment or postponement thereof.

Shareholders as of the close of business on December 6, 2023, the record date, are entitled to receive notice of, and to vote at, the Annual Meeting or any adjournment or postponement thereof.

The Annual Meeting will be held entirely online via live audio webcast at www.virtualshareholdermeeting.com/ MSM2024. There will not be an option to attend the Annual Meeting in person.

Shareholders as of the close of business on the record date may participate in, and submit questions and vote during, the Annual Meeting by visiting www.virtualshareholdermeeting.com/MSM2024. To log in, you must enter the 16-digit control number included on your Notice of Internet Availability of Proxy Materials or proxy card or the instructions that you receive by e-mail. If you are a beneficial shareholder, you may contact the shareholder of record (e.g., your bank, broker or other nominee) if you have questions about obtaining your control number. If you do not have a control number, you may still access the live audio webcast of the Annual Meeting as a guest, but you will not be able to submit questions or to vote online during the meeting.

Whether or not you expect to participate in the Annual Meeting, your vote is important. To assure your representation at the Annual Meeting, you are urged to cast your vote, as instructed in your Notice of Internet Availability of Proxy Materials or proxy card or the instructions that you receive by e-mail, as promptly as possible. If you received a copy of the proxy materials by mail, you may complete, sign, date and mail the proxy card in the envelope provided. Shareholders as of the close of business on the record date participating in the live audio webcast of the Annual Meeting may vote via the Internet during the meeting, even if they have voted via the Internet or by telephone or returned a completed proxy card. You may revoke your proxy at any time prior to the Annual Meeting. If you participate in and vote during the Annual Meeting, your proxy will be revoked automatically and your vote during the meeting will be counted.

By Order of the Board of Directors,

Neal Dongre

Vice President, General Counsel and

Corporate Secretary

Melville, New York

December 13, 2023

REVIEW THE PROXY STATEMENT AND VOTE IN ONE OF FOUR WAYS

Via the Internet

By Mail

Visit www.proxyvote.com

Complete, sign, date and mail your proxy

card or voting instruction form

By Telephone

Call the telephone number on your proxy card or voting instruction form

Virtually

Participate in the live audio webcast of the Annual Meeting at www.virtualshareholdermeeting.com/ MSM2024 and vote online during the meeting

IMPORTANT: Your vote is important. Whether or not you plan to participate in the live audio webcast of the Annual Meeting, we encourage you to read this Proxy Statement and to vote your shares as soon as possible.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS

FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JANUARY 24, 2024:

The Notice of 2024 Annual Meeting and 2023 Proxy Statement and the

2023 Annual Report to Shareholders are available at https://investor.mscdirect.com/annual-reports.

We are furnishing this Proxy Statement to you in connection with the solicitation of proxies by our Board of Directors (the "Board of Directors" or the "Board") to be used at the 2024 Annual Meeting of Shareholders (the "Annual Meeting"), or at any adjournment or postponement thereof. This Proxy Statement describes the matters to be presented at the Annual Meeting and related information that will help you vote your shares. References in this Proxy Statement to "MSC," the "Company," "we," "us," "our" and similar terms mean MSC Industrial Direct Co., Inc.

We have elected to take advantage of the "notice and access" rule of the United States Securities and Exchange Commission (the "SEC") that allows us to furnish proxy materials to shareholders online. We believe that electronic delivery expedites the receipt of proxy materials, while significantly lowering costs and reducing the environmental impact of printing and mailing full sets of proxy materials. As a result, on or about December 13, 2023, we mailed to our shareholders of record as of the close of business on December 6, 2023, either (i) a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy materials online and how to request paper copies of our proxy materials or (ii) a printed set of proxy materials, which includes the Notice of 2024 Annual Meeting of Shareholders, this Proxy Statement, our 2023 Annual Report to Shareholders and a proxy card. If you received a Notice of Internet Availability of Proxy Materials by mail, you will not receive a printed copy of the proxy materials unless you specifically request one. If you hold your shares through a bank, broker or other nominee, rather than directly in your own name, your intermediary will either forward to you a printed copy of the proxy materials or provide you with instructions on how you can access the proxy materials electronically.

TABLE OF CONTENTS

2023 PROXY STATEMENT SUMMARY

1

2024 Annual Meeting of Shareholders

1

Voting Matters

1

Director Nominees

2

Reclassification

3

Corporate Governance Highlights

4

Fiscal Year 2023 Performance Highlights

5

Fiscal Year 2023 Compensation Highlights

6

Compensation Summary

7

Ratification of the Appointment of Independent Registered Public Accounting Firm (Proposal No. 2)

8

Advisory Vote to Approve Named Executive Officer Compensation (Proposal No. 3)

8

Advisory Vote on the Frequency of Future Advisory Votes to Approve Named Executive Officer

Compensation (Proposal No. 4)

8

ELECTION OF DIRECTORS (PROPOSAL NO. 1)

9

Board and Committee Evaluations; Qualifications of Nominees

9

Director Nominees

10

Director Qualifications

14

CORPORATE GOVERNANCE

15

Director Independence

15

Board Committees

16

Shareholder Recommendations of Director Candidates

20

Universal Proxy Rules for Director Nominations

22

Director Meeting Attendance

22

Board Leadership Structure; Executive Sessions of the Independent Directors

22

Role of the Board in Risk Oversight

23

Corporate Governance Guidelines

23

Non-Executive Director Stock Ownership Guidelines

23

Overview of Director Compensation

24

Fiscal Year 2023 Director Compensation

24

Non-Executive Director Summary Compensation in Fiscal Year 2023

25

Code of Ethics and Code of Business Conduct

26

Corporate Social Responsibility

26

Shareholder Communications Policy

27

Related Party Transactions Policy

28

Related Party Transactions

28

Delinquent Section 16(a) Reports

28

INFORMATION ABOUT OUR EXECUTIVE OFFICERS

30

RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

FIRM (PROPOSAL NO. 2)

32

Fees Paid to Independent Registered Public Accounting Firm

32

Audit Committee Pre-Approval Policy

32

AUDIT COMMITTEE REPORT

34

COMPENSATION DISCUSSION AND ANALYSIS

36

Executive Summary

36

Compensation Philosophy and Objectives

37

Alignment with Compensation Best Practices

40

Shareholder Engagement and "Say-on-Pay" Vote

40

Compensation Committee

41

MSC Industrial Direct Co., Inc. Notice of 2024 Annual Meeting and 2023 Proxy Statement

i

How Compensation Decisions Are Made . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Role of Executive Officers in Compensation Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Compensation Consultant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Fiscal Year 2023 Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Competitive Positioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Executive Incentive Compensation Recoupment Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Executive Stock Ownership Guidelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Federal Income Tax Deductibility of Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

COMPENSATION RISK ASSESSMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 COMPENSATION COMMITTEE REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Summary Compensation Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Fiscal Year 2023 All Other Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Fiscal Year 2023 Grants of Plan-Based Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Outstanding Equity Awards at 2023 Fiscal Year-End . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Fiscal Year 2023 Option Exercises and Stock Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Pension Benefits and Nonqualified Deferred Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Potential Payments Upon Termination or Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 Potential Payments Upon Termination or Change in Control Table as of September 1, 2023 . . . . . . . . . . . 60 Indemnification Agreements; Directors and Officers Liability Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 62 CEO PAY RATIO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 PAY VERSUS PERFORMANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION

(PROPOSAL NO. 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

ADVISORY VOTE ON THE FREQEUNCY OF FUTURE ADVISORY VOTES TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION (PROPOSAL NO. 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

EQUITY COMPENSATION PLAN INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT . . . . . . . . . . . . . . . 71 SHAREHOLDER PROPOSALS FOR THE 2025 ANNUAL MEETING OF SHAREHOLDERS . . . . . . . . . . . 73 INFORMATION ABOUT THE ANNUAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 APPENDIX A: NON-GAAPFINANCIAL MEASURES AND DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . A-1

ii MSC Industrial Direct Co., Inc. Notice of 2024 Annual Meeting and 2023 Proxy Statement

2023 PROXY STATEMENT SUMMARY

This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider. You should read the entire Proxy Statement carefully before voting.

2024 Annual Meeting of Shareholders

Date:

Wednesday, January 24, 2024

Time:

9:00 a.m., Eastern Time

Virtual Meeting Access: Participate online at www.virtualshareholdermeeting.com/MSM2024

Record Date:

December 6, 2023

Who Can Vote:

Shareholders as of the close of business on the record date are entitled to receive

notice of, and to vote at, the Annual Meeting or any adjournment or postponement

thereof.

Voting Matters

Page No. for

Board Vote

Additional

Proposals

Recommendation

Information

1. Election of the eight directors nominated by the Board of

FOR EACH

Directors

. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

NOMINEE

9

2. Ratification of the appointment of Ernst & Young LLP to serve as our independent registered public accounting firm for fiscal

year 2024

FOR

32

3.

Advisory vote to approve the compensation of our named

executive officers

FOR

68

4.

Advisory vote on the frequency of future advisory votes to

approve the compensation of our named executive officers

1 YEAR

69

MSC Industrial Direct Co., Inc. Notice of 2024 Annual Meeting and 2023 Proxy Statement

1

Director Nominees

Director

Committee Memberships

Nominee

Age

Principal Occupation

Since

Independent

AC

CC

N&CGC

Erik Gershwind

52

President and Chief

2010

No

Executive Officer of

MSC

Louise Goeser

70

Chief Executive

2009

Yes

✓

✓C

Officer of LKG

Enterprises

Mitchell Jacobson

72

Non-Executive

1995

No

Chairman of the

Board of Directors of

MSC

Michael Kaufmann

61

Former Chief

2015

Yes

✓

✓

Executive Officer of

Cardinal Health, Inc.

Steven Paladino

66

Retired Executive

2015

Yes

✓

✓

✓C

Vice President and

Chief Financial

Officer of Henry

Schein, Inc.

Philip Peller

84

Retired Partner of

2000

Yes

✓C

✓

Arthur Andersen LLP

Rahquel Purcell

53

Chief Transformation

2022

Yes

✓

✓

Officer, North

America of L'Oréal

USA

Rudina Seseri

46

Founder and

2020

Yes

✓

✓

Managing Partner of

Glasswing Ventures,

LLC

AC

Audit Committee

CC Compensation Committee

N&CGC Nominating and Corporate Governance Committee

  • Member
  • Chairperson

2 MSC Industrial Direct Co., Inc. Notice of 2024 Annual Meeting and 2023 Proxy Statement

Reclassification

In October 2023, the Company completed the reclassification of its equity structure to eliminate its Class B Common Stock (the "Reclassification"), as contemplated by the Reclassification Agreement, dated as of June 20, 2023 (the "Reclassification Agreement"), by and among the Company, Mitchell Jacobson, Erik Gershwind, other members of the Jacobson / Gershwind family and certain entities affiliated with the Jacobson / Gershwind family (collectively, the "Jacobson / Gershwind Family Shareholders'). Pursuant to the Reclassification, each issued and outstanding share of Class B Common Stock was reclassified, exchanged and converted into 1.225 shares of Class A Common Stock of the Company.

The Class B Common Stock, with its 10 votes per share, was eliminated upon the completion of the Reclassification. This resulted in the elimination of the prior "high-vote/low-vote" voting structure, and the Company now has a single class of voting common stock (Class A Common Stock) with one vote per share. A number of corporate governance changes were also implemented in connection with the completion of the Reclassification:

  • the Jacobson / Gershwind Family Shareholders have the right to designate (i) two individuals (one of whom will be Mr. Erik Gershwind so long as he is the Company's Chief Executive Officer) for nomination for election to the Board so long as the Jacobson / Gershwind Family Shareholders own 10% or more of the issued and outstanding shares of Class A Common Stock and (ii) one individual for nomination for election to the Board so long as the Jacobson / Gershwind Family Shareholders own less than 10% but more than 5% of the issued and outstanding shares of Class A Common Stock (the Jacobson / Gershwind Family Shareholders currently own approximately 21% of the outstanding shares of Class A Common Stock);
  • the Jacobson / Gershwind Family Shareholders have each granted an irrevocable proxy authorizing the Company to vote such pro rata portion of shares of Class A Common Stock beneficially owned by the Jacobson / Gershwind Family Shareholders or their permitted transferees in excess of 15% of the issued and outstanding shares of Class A Common Stock in proportion to the votes of other holders (i.e., excluding any Jacobson / Gershwind Family Shareholders and their permitted transferees) entitled to vote and that do in fact vote;
  • certain standstill and lock-up provisions for the Jacobson / Gershwind Family Shareholders;
  • the transition of the approval standard for certain significant transactions (including mergers, asset sales, share exchanges and dissolution) from a two-thirds supermajority to a majority of the issued and outstanding shares of Class A Common Stock entitled to vote thereon;
  • the adoption of a "majority of the votes cast" standard for uncontested director elections;
  • the adoption of advance notice requirements for shareholders to provide notice of business proposals (other than shareholder proposals to be brought under Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) to be brought before an annual meeting or director nominations to be brought before an annual or special meeting; and
  • the designation of (i) the New York Supreme Court as the exclusive forum for (a) certain derivative claims, (b) claims asserting breach of fiduciary duties, (c) claims pursuant to the New York Business Corporation Law, the Company's Restated Certificate of Incorporation or the Company's Third Amended and Restated By-Laws or (d) claims governed by the internal affairs doctrine and (ii) the U.S. federal district courts as the exclusive forum for claims under the Securities Act of 1933, as amended (the "Securities Act").

MSC Industrial Direct Co., Inc. Notice of 2024 Annual Meeting and 2023 Proxy Statement

3

Corporate Governance Highlights

Director Independence

•

Six of our eight director nominees are independent.

• The independent directors meet regularly in executive sessions without

management present.

•

We have an independent Lead Director who serves as the presiding director at

the executive sessions of the independent directors.

•

All committees of the Board are composed exclusively of independent directors.

Board Oversight of Risk

•

The Board is responsible for the oversight of the Company's risk management

Management

and reviews our major financial, operational, compliance, cybersecurity,

environmental, social and governance ("ESG"), and reputational and strategic

risks, including steps to monitor, manage and mitigate such risks.

Stock Ownership

•

Each of our non-executive directors must own a minimum number of shares

Requirements

equal to five times his or her annual cash retainer on his or her first year of

service on the Board within five years of joining the Board.

•

Our Chief Executive Officer must own at least six times his annual base salary in

our common stock within five years from first appointed or elected.

•

Withing five years from first appointed or elected, each of our Executive Vice

Presidents must own at least three times his or her annual base salary in our

common stock, each of our Senior Vice Presidents must own at least two times

his or her annual base salary in our common stock, and each of our Vice

Presidents (who are executive officers) must own at least one time his or her

annual base salary in our common stock.

Annual Performance

•

The Nominating and Corporate Governance Committee annually reviews the

Evaluation

performance of the Board and Board committees.

•

The Board and each Board committee conduct annual written self-evaluations to

help ensure that the Board and each Board committee have the appropriate

scope of activities.

Annual Election of

•

All directors stand for election annually.

Directors

Majority Voting Standard

•

In connection with the Reclassification, the Company's Certificate of

for Uncontested Director

Incorporation and By-Laws were amended to provide for a "majority of the votes

Elections

cast" standard for uncontested director elections. In addition, our Corporate

Governance Guidelines require each director nominee to tender an irrevocable

conditional resignation that will be effective only upon both (i) such nominee's

failure to receive the required vote at the next shareholders' meeting at which

such nominee faces re-election and (ii) the Board's acceptance of such

resignation. If an incumbent director fails to receive the required vote for re-

election, the Nominating and Corporate Governance Committee will act on an

expedited basis to make a recommendation to the Board as to whether to accept

or reject the resignation, or whether other action should be taken. The Board will

then consider the Nominating and Corporate Governance Committee's

recommendation and take such action as it determines to be appropriate.

Board and Board

•

The Nominating and Corporate Governance Committee annually reviews the

Committee Evaluation and

composition of the Board and Board committees.

Composition

•

The annual written self-evaluations conducted by the Board and each Board

committee also ensure that the Board and Board committees have the

appropriate number and mix of members, skills and experience.

•

The Nominating and Corporate Governance Committee assesses the Board's

composition in the context of the Board's needs and objectives, including

consideration of Board diversity and director tenure, age, skills, background and

experience.

4 MSC Industrial Direct Co., Inc. Notice of 2024 Annual Meeting and 2023 Proxy Statement

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MSC Industrial Direct Co. Inc. published this content on 11 December 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 December 2023 14:51:01 UTC.