ý	No fee required

¨	Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

1)	Title of each class of securities to which transaction applies:

2)	Aggregate number of securities to which transaction applies:

3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):

4)	Proposed maximum aggregate value of transaction:

5)	Total fee paid:

¨	Fee paid previously with preliminary materials

¨	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

1)	Amount Previously Paid:

2)	Form, Schedule or Registration Statement No.:

3)	Filing Party:

4)	Date Filed:

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1.	Elect 13 members of Macy's board of directors;

2.	Ratify the appointment of KPMG LLP as Macy's independent registered public accounting firm for the fiscal year ending January 28, 2017;

3.	Cast an advisory vote to approve the compensation of our named executive officers; and

4.	Conduct any other business as may properly come before the meeting or any postponement or adjournment of the meeting.

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Time and date:	11:00 a.m., Eastern Time, on May 20, 2016

Place:	Macy's, Inc., 7 West Seventh Street, Cincinnati, OH 45202

Record date:	March 24, 2016

How to vote:	In general, you may vote either in person at the annual meeting or by telephone, the Internet, or mail.

Common shares outstanding as of record date:	311,764,831 shares

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•	Comparable sales on an owned basis in fiscal 2015 were down 3.0%.

•	Comparable sales on an owned plus licensed basis for fiscal 2015 were down 2.5% compared to fiscal 2014.

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Fiscal 2015 annual incentive award. The annual incentive award payouts for fiscal 2015 performance were subject to achievement of pre-determined targeted levels of financial results with respect to three key performance metrics included in our annual business plan (sales, Adjusted EBIT and cash flow). The CMD Committee determined that Company performance with respect to each of the three performance metrics fell below the threshold level. This resulted in no incentive award payments to the named executive officers (see page 53).

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Vesting of PRSUs. With respect to performance-based restricted stock units (PRSUs) granted in fiscal 2013, our financial performance over the three-year (fiscal 2013-2015) performance period with respect to cumulative Adjusted EBITDA, average Adjusted EBITDA margin, average ROIC and relative total shareholder return (TSR) performance metrics resulted in 48.88% of the targeted number of PRSUs being earned (see page 55).

•	PRSU grants. The CMD Committee granted PRSUs to the named executive officers with a three-year (fiscal 2015-2017) performance period. These awards have cumulative Adjusted EBITDA, average Adjusted EBITDA margin, average ROIC and relative TSR performance metrics (see page 54).

•	Long-Term opportunities. Compensation increases for the named executive officers for fiscal 2015 were primarily delivered through an increase in long-term incentive opportunities in furtherance of the Company's pay-for-performance philosophy (see page 49).

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•	if required by applicable law;

•	to persons engaged in the receipt, counting, tabulation or solicitation of proxies who have agreed to maintain shareholder confidentiality as provided in the policy;

•	in those instances in which shareholders write comments on their proxy cards or otherwise consent to the disclosure of their vote to Macy's management;

•	in the event of a proxy contest or a solicitation of proxies in opposition to the voting recommendations of the Board of Directors;

•	in respect of a shareholder proposal that the Nominating and Corporate Governance Committee of the Board, referred to as the NCG Committee, after having allowed the proponent of the proposal an opportunity to present its views, determines is not in the best interests of Macy's and its shareholders; and

•	in the event that representatives of Macy's determine in good faith that a bona fide dispute exists as to the authenticity or tabulation of voting materials.

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•	Internet:    You can vote over the Internet at the Web address shown on your Notice Regarding the Availability of Proxy Materials or your proxy card if you received a proxy card up until 11:59 p.m., Eastern Time, on May 19, 2016. Internet voting is available 24 hours a day, seven days a week. When you vote over the Internet, you should not return your proxy card.

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Telephone:    You can vote by telephone by calling the toll-free number provided on the Web address referred to above or on your proxy card up until 11:59 p.m., Eastern Time, on May 19, 2016. Telephone voting is available 24 hours a day, seven days a week. Easy-to-follow voice prompts allow you to vote your shares and confirm that your instructions have been properly recorded. When you vote by telephone, you should not return your proxy card.

•	Mail:    If you received a proxy card, you can vote by mail by simply signing, dating and mailing your proxy card in the postage-paid envelope included with this proxy statement. Your proxy card must be received prior to 11:59 p.m., Eastern Time, on May 19, 2016.

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•	submitting evidence of your revocation to the Company's Corporate Secretary;

•	voting again over the Internet or by telephone prior to 11:59 p.m., Eastern Time, on May 19, 2016;

•	signing another proxy card bearing a later date and mailing it so that it is received prior to 11:59 p.m., Eastern Time, on May 19, 2016; or

•	voting in person at the annual meeting, although attendance at the annual meeting will not, in itself, revoke a proxy.

•	following the instructions provided on your proxy card, voting instruction card or Notice Regarding the Availability of Proxy Materials; or

•	going to www.proxyvote.com and following the instructions provided.

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(1)	Based on a Schedule 13G/A dated January 22, 2016 and filed with the SEC by BlackRock on January 26, 2016. The Schedule 13G/A reports that, as of December 31, 2015, BlackRock had sole voting power over 19,747,034 shares and sole dispositive power over 22,551,205 shares of Macy's common stock.

(2)

Based on a Schedule 13G/A dated February 10, 2016 and filed with the SEC by Vanguard on February 10, 2016. The Schedule 13G/A reports that, as of December 31, 2015, Vanguard had sole voting power over 591,427 shares, shared voting power over 32,900 shares, sole dispositive power over 16,849,316 shares and shared dispositive power over 634,258 shares of Macy's common stock. The Schedule 13G/A also reports that Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of Vanguard, is the beneficial owner of 491,282 of the shares as a result of its serving as investment manager of collective trust accounts, and Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of Vanguard, is the beneficial owner of 243,121 of the shares as a result of its serving as investment manager of Australian investment offerings.

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(1)

Aggregate number of shares of Macy's common stock currently held or which may be acquired within 60 days after March 24, 2016 (i) through the exercise of options granted under our Amended and Restated 2009 Omnibus Incentive Compensation Plan, referred to as the 2009 Omnibus Plan, our 1995 Executive Equity Incentive Plan, referred to as the 1995 Equity Plan, or our 1994 Stock Incentive Plan, referred to as the 1994 Stock Plan and (ii) with respect to the Non-Employee Directors, also through distributions in settlement of deferred stock credits that would be triggered if the director's service on the Board were to end during the 60-day period.

(2)

Number of shares of Macy's common stock which may be acquired within 60 days after March 24, 2016 (i) through the exercise of options granted under the 2009 Omnibus Plan, the 1995 Equity Plan and the 1994 Stock Plan and (ii) with respect to Non-Employee Directors, also through distributions in settlement of deferred stock credits that would be triggered if the director's service on the Board were to end during the 60-day period.

(3)	William H. Lenehan is not included in the table since he was not a director as of the March 24, 2016 record date. He became a director effective as of April 1, 2016.

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The director may not be (and may not have been within the preceding 36 months) an employee and no member of the director's immediate family may be (and may not have been within the preceding 36 months) an executive officer of Macy's or any of its subsidiaries. For purposes of these Standards for Director Independence, "immediate family" includes a person's spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers and sisters-in-law, and anyone (other than domestic employees) who shares such person's home.

•

Neither the director nor any member of his or her immediate family receives, or has received during any 12-month period within the preceding 36 months, direct compensation of more than $120,000 per year from Macy's or any of its subsidiaries (other than director and committee fees and pension or other forms of deferred compensation for prior service that is not contingent on continued service or, in the case of an immediate family member, compensation for service as a non-executive employee).

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(A) The director is not a current partner or employee of a firm that is Macy's internal or external auditor; (B) no member of the director's immediate family is a current partner of such a firm; (C) no member of the director's immediate family is an employee of such a firm and personally works on Macy's audit; or (D) neither the director nor any member of his or her immediate family was within the last three years a partner or employee of such a firm and personally worked on Macy's audit within that time.

•	The director is not a current employee and no member of his or her immediate family is a current executive officer of a company that makes payments to, or receives payments from, Macy's for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million or 2% of such other company's consolidated gross revenues.

•	The director does not serve as an executive officer of a charitable or non-profit organization to which Macy's has made contributions that, in any of the last three fiscal years, exceed the greater of $1 million or 2% of the charitable or non-profit organization's consolidated gross revenues.

•	Neither the director nor a member of the director's immediate family is employed as an executive officer (and has not been so employed for the preceding 36 months) by another company where any of Macy's present executive officers at the same time serves or served on that company's compensation committee.

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•	Pay philosophy, peer group and market positioning are appropriate in light of our business model and size relative to our peer group of companies.

•	The programs have an appropriate degree of balance with respect to the mix of cash and equity compensation and measure performance against both annual and multi-year standards.

•	Performance goals are set at levels that are sufficiently high to encourage strong performances and support the resulting compensation expense, but within reasonably attainable parameters to discourage pursuit of excessively risky business strategies.

•	The performance metrics focus participants on profitable growth, asset efficiency and sustainable long-term shareholder value creation, thereby holding management accountable to achievement of key operational and strategic priorities that support our short- and long-term strategic objectives.

•	The CMD Committee has the ability to reduce amounts earned under the annual incentive program to reflect a subjective evaluation of the quality of earnings, individual performance and other factors that should influence earned compensation.

•	Meaningful risk mitigators are in place, including substantial stock ownership guidelines, the three-year relative TSR performance goal in the performance share program, compensation clawback provisions, anti-hedging/pledging policies, independent CMD Committee oversight, and the engagement of an independent consultant that does no other work for the Company or management.

•	reviewing the professional services provided by our independent registered public accounting firm and the independence of such firm prior to initial engagement of the firm and annually thereafter;

•	reviewing the scope of the audit by our independent registered public accounting firm;

•	reviewing any proposed non-audit services by our independent registered public accounting firm to determine if the provision of such services is compatible with the maintenance of their independence, and approval of same;

•	reviewing our annual financial statements, systems of internal accounting controls, material legal developments relating thereto, and legal compliance policies and procedures;

•	discussing policies with respect to our risk assessment and risk management;

•	reviewing matters with respect to our legal, accounting, auditing and financial reporting practices and procedures as it may find appropriate or as brought to its attention, including our compliance with applicable laws and regulations;

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•	monitoring the functions of our Compliance and Ethics organization, including review and discussing with management and the Board the organization's reports describing its on-going projects, the status of its communications and training programs, the status of pending compliance issues and other matters;

•	reviewing with members of our internal audit staff the internal audit department's staffing, responsibilities and performance, including its audit plans, audit results and actions taken with respect to those results; and

•	establishing procedures for the Audit Committee to receive, review and respond to complaints regarding accounting, internal accounting controls, and auditing matters, as well as confidential, anonymous submissions by employees of concerns related to questionable accounting or auditing matters.

•	reviewing the salaries of our chief executive officer and other executive officers and, either as a committee or together with the other independent directors (as directed by the Board), setting compensation levels for these executives;

•

administering our incentive and stock option plans, including (i) establishing any annual or long-term performance goals and objectives and maximum annual or long-term incentive awards for the chief executive officer and the other executives, (ii) determining whether and the extent to which annual and/or long-term performance goals and objectives have been achieved, and (iii) determining related annual and/or long-term incentive awards for the chief executive officer and the other executives;

•	reviewing and approving the benefits of the chief executive officer and our other executive officers;

•	reviewing and approving any proposed employment agreement with, and any proposed severance, termination or retention plans, agreements or payments applicable to, any of our executive officers;

•	advising and consulting with management regarding our pension, benefit and compensation plans, policies and practices;

•	establishing chief executive officer and key executive succession plans, including plans in the event of an emergency, resignation or retirement; and

•	reviewing and monitoring executive development strategies and practices for senior level positions and executives in order to assure the development of a pool of management and executive personnel for adequate and orderly management succession.

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•	reviewing capital projects and other financial commitments and approving such projects and commitments above $25 million and below $50 million, reviewing and making recommendations to the Board with respect to approval of all such projects and commitments of $50 million and above, and reviewing and tracking the actual progress of approved capital projects against planned projections;

•	reporting to the Board on potential transactions affecting our capital structure, such as financings, refinancings and the issuance, redemption or repurchase of our debt or equity securities;

•	reporting to the Board on potential changes in our financial policy or structure which could have a material financial impact on the Company;

•	reviewing the financial considerations relating to acquisitions of businesses and operations involving projected costs above $25 million and below $50 million and approving all such transactions, and recommending to the Board on all such transactions involving projected costs of $50 million and above;

•	reviewing the financial considerations relating to dispositions of businesses and operations involving projected proceeds above $50 million, and endorsing and recommending to the Board all such transactions; and

•	reviewing the management and performance of the assets of our retirement plans.

•	identifying and screening candidates for future Board membership;

•	proposing candidates to the Board to fill vacancies as they occur, and proposing nominees to the Board for election by the shareholders at annual meetings;

•	reviewing our Corporate Governance Principles and recommending to the Board any modifications that the NCG Committee deems appropriate;

•	overseeing the annual evaluation of and reporting to the Board on the performance and effectiveness of the Board and its committees and other issues of corporate governance, and recommending to the Board any changes concerning the composition, size, structure and activities of the Board and the committees of the Board as the NCG Committee deems appropriate based on its evaluations;

•	reviewing and reporting to the Board with respect to director compensation and benefits and making recommendations to the Board as the NCG Committee deems appropriate; and

•	considering possible conflicts of interest of Board members and management and making recommendations to prevent, minimize, or eliminate such conflicts of interest.

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•	personal qualities and characteristics, accomplishments and reputation in the business community;

•	knowledge of the retail industry or other industries relevant to our business;

•	relevant experience and background that would benefit the Company;

•	ability and willingness to commit adequate time to Board and committee matters;

•	the fit of the individual's skills and personality with those of other directors and potential directors in building a Board that is effective, collegial and responsive to our needs; and

•	diversity of viewpoints, background, experience and demographics.

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Leadership Experience: Directors with experience in significant senior leadership positions with large organizations over an extended period provide the Company with special insights. Strong leaders bring vision, strategic agility, diverse and global perspectives and broad business insight to the Company. These individuals demonstrate a practical understanding of how large organizations operate, including the importance of succession planning, talent management and how employee and executive compensation is set. They possess skills for managing change and growth and demonstrate a practical understanding of organizations, operations, processes, strategy, risk management and methods to drive growth.

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Finance Experience: An understanding of finance and related reporting processes is important for directors. We measure our operating and strategic performance by reference to financial goals, including for purposes of executive compensation. In addition, accurate financial reporting is critical to our success. Directors who are financially literate are better able to analyze our financial statements, capital structure and complex financial transactions and ensure the effective oversight of the Company's financial measures and internal control processes.

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Industry Knowledge and Global Business Experience: We seek to have directors with experience as executives, directors or in other leadership positions in areas relevant to the retail industry on a global scale. We value directors with a global business perspective and those with experience in our high priority areas, including consumer products, customer service, licensing, human resource management and merchandising (including e-commerce and other channels of commerce).

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Sales and Marketing Experience: Directors with experience in dealing with consumers, particularly in the areas of marketing, marketing-related technology, advertising or otherwise selling products or services to consumers, provide valuable insights to the Company. They understand consumer needs and are experienced in identifying and developing marketing campaigns that might resonate with consumers, the use of technology and emerging and non-traditional marketing media (such as social networking, viral marketing and e-commerce), and identifying potential changes in consumer trends and buying habits.

•	Technology Experience: Directors with an understanding of technology as it relates to the retail industry and/or marketing help the Company focus its efforts in developing and investing in new technologies.

•	Public Company Board Experience: Directors who have experience on other public company boards develop an understanding of corporate governance trends affecting public companies and the extensive and complex oversight responsibilities associated with the role of a public company director. They also bring to the Company an understanding of different business processes, challenges and strategies.

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(1)	All cash compensation is reflected in the "Fees Earned or Paid in Cash" column, whether it is paid currently in cash or deferred under the Director Deferred Compensation Plan.

(2)

The Non-Employee Directors other than Mr. Blake received 2,104 restricted stock units on May 15, 2015, valued at $66.53 per share, which was the closing price of our common stock on the grant date. With respect to Non-Employee Directors elected after the annual meeting date, our practice has been to grant restricted stock units valued at 50% of the annual grant if the director is elected within six months after the annual meeting. Mr. Blake received 1,848 restricted stock units on December 10, 2015, valued at $37.88 per share, which was the closing price of our common stock on that date. The following table shows the number of stock options, deferred stock unit credits and restricted stock units held by each of the Non-Employee Directors as of the end of fiscal 2015.

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(3)

The present value of benefits under the retirement plan for Non-Employee Directors for each individual was determined as a deferred temporary life annuity based on years of Board service prior to May 16, 1997. The present value of benefits was determined using an effective discount rate of 4.23%. Base mortality rates are the RP-2014 White Collar mortality table adjusted to back out estimated mortality improvements from 2006 to the measurement date using MP-2015. Mortality is projected generationally from the measurement date using scale MP-2014. Scale MP-2014 defines how future mortality improvements are incorporated into the projected mortality table and is based on a blend of Social Security experience and the long-term assumption for mortality improvement rates by the Society of Actuaries' Retirement Plans Experience Committee. The calculations assume that the annual cash retainer remains at $70,000 (the retainer at the end of fiscal 2015) and a retirement at age 74, the mandatory retirement age for Directors as of the end of fiscal 2015.

(4)	"All Other Compensation" consists of the items shown below. Merchandise discounts are credited to the Directors' Macy's charge accounts.

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•	any shares beneficially owned by the director or members of the director's immediate family;

•	restricted stock or restricted stock units before the restrictions have lapsed; and

•	stock credits or other stock units credited to a director's account.

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•	aligns executive compensation with shareholder value on an annual and long-term basis through a combination of base pay, annual incentive and long-term incentives;

•	includes a mix of direct compensation elements that emphasizes performance results, with 89% of the targeted compensation for the Chief Executive Officer and approximately 74% on average of the targeted compensation for the other Named Executives being tied to changes in shareholder value and how well the Company performs against its business plans and objectives;

•	delivers annual incentive payouts to executives only when they achieve targeted levels of financial results with respect to three key performance metrics included in our annual business plan - sales, earnings before interest and taxes (EBIT) and cash flow;

•	encourages long-term decision-making by aligning the interests of executives with those of shareholders through equity incentives that are subject to multi-year vesting and/or performance requirements that include financial, operational and strategic objectives as well as changes in absolute and relative shareholder value over time; and

•	includes features that mitigate risks to the Company, including limits on incentive awards, use of multiple performance measures in our incentive plans, substantial stock ownership guidelines, compensation clawback provisions, anti-hedging/pledging policies, independent CMD Committee oversight and engagement of an independent consultant that does no other work for the Company or management.

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•	Terry J. Lundgren, Chairman and Chief Executive Officer. Mr. Lundgren has been with Macy's for more than 34 years, and has served as our Chief Executive Officer for the last 13 years, making him one of the longest-tenured CEOs in the department stores industry.

•	Karen M. Hoguet, Chief Financial Officer. Mrs. Hoguet has been with Macy's for more than 33 years, and has been our Chief Financial Officer for 18 years.

•	Jeffrey Gennette, President. Mr. Gennette has been with Macy's for more than 32 years. He has been in his current position since March 2014. From February 2009 through February 2014, Mr. Gennette was our Chief Merchandising Officer.

•	Jeffrey A. Kantor, Chief Stores Officer. Mr. Kantor has been with Macy's for more than 33 years. He has been in his current position since February 2015. From February 2012 to February 2015, Mr. Kantor was the Chairman of macys.com. He was macys.com's President for Merchandising from August 2010 to February 2012 and President - Merchandising for Home from May 2009 to August 2010.

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Peter R. Sachse, Chief Growth Officer. Mr. Sachse has been with Macy's for more than 32 years. He has been in his current position since February 2016. He served as Chief Innovation and Business Development Officer from February 2015 to February 2016 and as Chief Stores Officer from February 2012 to February 2015. He was our Chief Marketing Officer from February 2009 to February 2012 and Chairman of macys.com from April 2006 to February 2012.

•	The senior-most executives, including the Named Executives, are held most accountable to shareholders by varying the portion of variable, performance-based pay directly with each executive's level of responsibility:

•	89% of Mr. Lundgren's targeted total direct compensation for fiscal 2015 was delivered through variable incentives in which payout is tied to changes in stock price and pre-determined performance objectives.

•	On average, approximately 74% of the targeted total direct compensation for fiscal 2015 of the other Named Executives was delivered through variable incentives in which payout is tied to changes in stock price and pre-determined performance objectives.

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We emphasize equity-based long-term incentives to ensure that these executives are focused on longer-term operating and stock price performance in addition to shorter-term goals. The targeted value for long-term incentive awards for the Named Executives other than Mr. Lundgren is approximately twice the targeted value of their annual incentive awards and for Mr. Lundgren is approximately three times the targeted value of such awards.

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The value received from our variable, performance-based pay, if any, is directly related to our performance and reflects a combination of internal financial measures of success, such as operating income (which represents earnings before interest and taxes, or EBIT), sales, cash flow, return on invested capital (ROIC) and external measurements of success, such as stock price performance on an absolute and relative-to-peers basis.

•	To ensure that costs are affordable and reasonable in relation to our operating results, no payments are made under the annual incentive plan unless we have positive EBIT and achieve a net profit for the fiscal year, even if other performance objectives are met.

•	Equity-based long-term incentive awards are subject to multi-year vesting and/or performance requirements to link compensation to performance measured by achievement of financial, operational and strategic objectives as well as changes in absolute and relative shareholder value over time.

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To further reinforce the long-term alignment of executive interests with shareholders, we maintain policies that require executives to accumulate and hold substantial amounts of Macy's common stock and we prohibit executives from hedging the risk of such ownership or pledging such shares as collateral. We also maintain a clawback policy that enables the recapture of previously paid cash and equity incentive compensation in certain circumstances involving a financial restatement.

•	Comparable sales on an owned basis in fiscal 2015 were down 3.0%.

•	Comparable sales on an owned plus licensed basis for fiscal 2015 were down 2.5% compared to fiscal 2014.

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•	determined that no annual incentive award payments would be made to the Named Executives since fiscal 2015 performance fell below the threshold performance level for pre-determined EBIT, Sales and Cash Flow goals;

•	determined that the Named Executives had earned 48.88% of the targeted number of performance-based restricted stock units granted in fiscal 2013, based on meeting the cumulative EBITDA threshold of $8.25 billion and the level of achievement against average EBITDA margin, average ROIC and relative TSR goals over the three-year (fiscal 2013-2015) performance period;

•	granted performance-based restricted stock units and stock options to the Named Executives, with a mix of 60% performance-based restricted stock units and 40% stock options;

•	increased the long-term incentive award opportunities of the Named Executives to align with market rates and further its pay-for-performance philosophy;

•	provided base salary increases only in connection with an expansion of responsibilities (Mr. Gennette) and a promotion (Mr. Kantor); and

•	approved additional performance-based restricted stock units for Mr. Sachse as a retention incentive and in connection with a re-structuring of his responsibilities.

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•	Providing competitive and reasonable compensation opportunities;

•	Focusing on results and strategic objectives;

•	Fostering a pay-for-performance culture;

•	Attracting and retaining key executives; and

•	Balancing risk and reward and ensuring accountability to shareholders.

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•	our compensation philosophy,

•	our financial and operating performance,

•	compensation policies and practices for our employees generally, and

•	practices and executive compensation levels within peer companies.

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•	the design of our annual and long-term incentive plans, including the degree to which the incentive plans support our business strategy and balance risk-taking with potential reward;

•	the setting of performance objectives;

•	peer group pay and performance comparisons;

•	the competitiveness of compensation provided to our key executives;

•	changes to the Named Executives' compensation levels;

•	the design of other forms of key executive compensation and benefits programs; and

•	the preparation of public filings related to executive compensation, including this CD&A and the accompanying tables and footnotes.

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•	We have grown from being a $15 billion regional department store company to a national omnichannel retailer with more than $27 billion in sales.

•	We have grown our digital business, accomplishing annual double-digit increases in online sales over the past several years.

•	We completed the acquisition of Bluemercury, which added new capabilities to our beauty business.

•	We developed and launched Macy's Backstage and Bloomingdale's Outlet as an off-price strategy.

•	We have become a customer-centric organization that embraces localization, a seamless omnichannel blend of stores, online and mobile, and more meaningful customer engagement on the selling floor and all other customer interactions.

•	Adjusted EBITDA increased more than 13% and 90 basis points as a percent of sales from fiscal 2011 to 2014. We achieved our long-term goal of 14% Adjusted EBITDA margin rate level in 2014. Although the Adjusted EBITDA margin rate fell below 14% in fiscal 2015, we are taking actions to re-attain that level over time.

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•	Adjusted Diluted EPS increased approximately 53% from fiscal 2011 to 2014. The year-over-year decline in Adjusted Diluted EPS in fiscal 2015 was our first year-over-year decline since 2008.

•	Comparable sales on an owned basis increased for four consecutive years, from fiscal 2011 to fiscal 2014. In addition, comparable sales on an owned plus licensed basis have grown by approximately 2.2% annually from fiscal 2011 to fiscal 2015.

•	Our stock price has reacted favorably during this time period on both an absolute and relative-to-peers basis, with total shareholder return over the last five years of 94.5%, which is above the 73rd percentile versus our 12-company peer group over the same five-year period.

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(i)	an analysis of the design of our annual incentive and long-term incentive programs in relation to our financial and strategic priorities, human resources objectives and market practice to determine whether changes were appropriate,

(ii)	a competitive analysis of the targeted total direct compensation for the Named Executives, including base salary, annual incentives and long-term incentives, and

(iii)	a competitive assessment of our long-term incentive grant practices, including a review of share usage (shares granted in equity plans as a percentage of weighted-average outstanding shares) and potential dilution relative to peer group practice and a fair value transfer analysis that measured the aggregate cost of long-term incentives as a percent of market capitalization and revenue.

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The Board increased Mr. Lundgren's targeted long-term opportunity (from $8.215 million to $10 million) to position his targeted total direct compensation at approximately the 75th percentile of the executive compensation peer group and further ensure that increases in his compensation are directly linked to Company longer-term operating and stock price performance. No changes were made to Mr. Lundgren's base salary or annual incentive award opportunity for fiscal 2015 and, as a result, his targeted total direct compensation opportunity increased by approximately 14% for fiscal 2015.

•	The CMD Committee approved increases to the targeted total direct compensation for Mr. Gennette in connection with the expansion of his responsibilities relating to the Company's merchandise planning function and for Mr. Kantor in connection with his promotion to Chief Stores Officer.

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The CMD Committee increased Mr. Gennette's base salary from $950,000 to $1 million, his target annual incentive award opportunity from 100% to 125% of base salary (with corresponding changes to his threshold and maximum award opportunities) and increased his targeted long-term incentive award opportunity from $1.8 million to $2.7 million. As a result of these changes, approximately 80% of Mr. Gennette's targeted total direct compensation for fiscal 2015 was tied to performance objectives and changes in stock price.

◦	The CMD Committee increased Mr. Kantor's base salary from $690,000 to $775,000 and increased his targeted long-term incentive award opportunity from $900,000 to $1.325 million.

•

At its March 2015 meeting, the CMD Committee continued its emphasis on performance-based pay and increased the targeted long-term incentive award opportunity for the Named Executives (other than Mr. Lundgren and Mr. Gennette) from $1.325 million to $1.415 million to position their targeted opportunity at approximately the median of the executive compensation peer group. As a result of this change, approximately 70% of their targeted total direct compensation for fiscal 2015 was tied to performance objectives and changes in stock price.

•	At its March 2015 meeting, the CMD Committee approved an additional $1 million grant of performance restricted stock units to Mr. Sachse as a retention incentive and in connection with a re-structuring of his responsibilities.

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•	The EBIT measure focuses the executives on maximizing operating income and is a good indicator of how effectively our annual business objectives and strategies, which focus on growth in profits, are being executed.

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Sales, a priority for retailers, are a measure of growth and provide opportunities for the achievement of various other financial measures, including EBIT and cash flow. The Sales target under the Incentive Plan includes sales of departments licensed to third parties and excludes certain items that are included in externally reported sales under GAAP, including licensed department income, shipping and handling fees and sales to third-party retailers.

•	Cash Flow is indicative of the manner in which our operating activities, together with our investing activities, actually generate cash.

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•	60% in performance-based restricted stock units that vest after a three-year performance period only if we meet pre-determined financial performance and relative TSR goals; and

•	40% in stock options that vest in installments over a four-year period and have value only if our stock price increases over the grant price of the options.

•	establishing a direct link between compensation and the achievement of our long-term financial objectives and returns to shareholders on both absolute and relative basis;

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•	the achievement of longer-term goals related to our three key strategies (the My Macy's localization initiative, driving the omnichannel business and embracing customer centricity, including engaging customers on the selling floor through the Magic Selling program); and

•	enhancing retention by mitigating the impact of fluctuations in the price of the common stock with the use of performance-based restricted stock units in combination with stock options.

*	Straight-line interpolation will apply to performance levels between the ones shown.

•	With respect to EBITDA margin, the Company has long stated to investors that its objective is to achieve an EBITDA margin rate of 14%, consistent with historic peak profit levels for the Company and above that of our key competitors.

•	ROIC is a measure of investment productivity and the efficiency in which assets are employed in the operation of the business. It is a very important measure of our performance over time because capital decisions need to be

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•

Relative TSR is a good measure of shareholder value creation, especially when measured on a consistent basis over extended periods of time. In addition, peer-to-peer measurement is viewed as an executive compensation "best practice" by many proxy advisory firms and corporate governance experts. The CMD Committee determined that TSR should be measured against that of the compensation peer group since that group includes our primary competitors for business, talent and investor capital and results in a consistent group being used internally for pay and performance comparisons. The 20% weighting given to the relative TSR metric ensures that a meaningful amount of the grant is subject to relative TSR results.

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(i)	in the Incentive Plan, including the Named Executives, to repay income, if any, derived from the annual incentive, and

(ii)	in the long-term incentive compensation program, including the Named Executives, to repay income derived from performance restricted stock units or stock options, if any,

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•	Macy's stock beneficially owned (directly or indirectly) by the executive or owned jointly with any immediate family member of the executive;

•	Any stock credits or other stock units credited to an executive's account through deferrals under our deferred compensation program or otherwise;

•	Time-based restricted stock or restricted stock units granted to the executive, whether or not vested;

•	Time-based stock credits during the performance and holding periods under our stock credit plans;

•	Performance-based stock credits during the holding periods that follow the performance periods under the stock credit plans; and

•	The executive's proportionate share of the Macy's stock fund under our 401(k) Plan.

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(1)

The amounts in this column for fiscal 2015 include the fair value for performance-based restricted stock units awarded in fiscal 2015 determined by using a weighted average grant date price for the common stock of approximately $61.51 per share, assuming the "target" number of units is earned. Assuming that the "maximum" number of units is earned, the grant date fair value amounts for the performance-based restricted stock units would be $8,697,926 for Mr. Lundgren, $2,348,389 for Mr. Gennette, $2,680,288 for Mr. Sachse and $1,230,711 for each of the other Named Executives. See footnote (4) to the 2015 Grants of Plan-Based Awards table.

(2)	The amounts in this column reflect the grant date value of stock options determined using the Black-Scholes option pricing model in accordance with ASC Topic 718. See footnote (4) to the 2015 Grants of Plan-Based Awards table for the assumptions used in making this determination.

(3)

We did not pay above-market interest under our executive deferred compensation plan in 2015, therefore, the amounts reflected in this column relate to pension benefits only. The amounts reflected for fiscal 2015 in this column represent the change in the actuarial present value of accumulated pension benefits under our cash balance pension plan (CAPP) and supplementary executive retirement plan (SERP) in fiscal 2015. The assumptions used in determining the present value of benefits are the same assumptions used for financial reporting purposes. The present value of benefits was determined using a PBO effective discount rate of 4.17% for the CAPP and 4.23% for the SERP. For the CAPP, base mortality rates are determined using the RP-2014 Blue Collar mortality table adjusted to back out estimated mortality improvements from 2006 to the measurement date using MP-2014, and then projected forward to the measurement date using MP-2015. For the SERP, base mortality rates are determined using the RP-2014 White Collar mortality table adjusted to back out estimated mortality improvements from 2006 to the measurement date using MP-2014, and then projected forward to the measurement date using MP-2015. Mortality is projected generationally from the measurement date using scale MP-2015 for both the CAPP and SERP. Scale MP-2015 defines how future mortality improvements are incorporated into the projected mortality table and is based on a blend of Social Security experience and the long-term assumption for mortality improvement rates by the Society of Actuaries' Retirement Plans Experience Committee. The assumed retirement age used for these calculations was the normal retirement age of 65, as defined by the plans, and each Named Executive was assumed to retire at the normal retirement age.

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(a)

Mr. Lundgren is the only Named Executive who is permitted to make personal use of company aircraft. The amount shown for aircraft usage is calculated based on the cost of fuel and other variable costs associated with the particular personal flights. Mr. Lundgren's wife and/or other guests accompany him on some flights. There are no additional incremental costs associated with their travel on those flights. Mr. Lundgren is required to reimburse the Company to the extent that the calculated incremental costs associated with his personal usage of Company aircraft exceed $75,000 in the aggregate. For purposes of calculating the incremental costs associated with Mr. Lundgren's personal usage of Company aircraft:

•	Flights were deemed business or personal based on whether there was a business purpose for the flight.

•	If a trip was deemed personal, ferry flights, if any, were included as personal.

•	If a trip included both business and personal destinations, we included as personal the excess, if any, of the aggregate expenses for the trip over the costs of flying to and from the originating airport to the business destination or destinations.

(b)

The amount shown reflects the costs relating to personal use by Mr. Lundgren of a dedicated car and driver that the Company makes available to him for safety reasons pursuant to the recommendation of a third-party security study. The incremental cost calculation for personal use of the car and driver includes driver overtime, tolls, gratuities, lodging for the drivers, maintenance and fuel costs incurred in connection with such personal use.

(c)	The amounts shown reflect Company matching contributions on salary and/or annual incentive awards deferred under the Company's Deferred Compensation Plan ("DCP"). Such deferred amounts are matched in the same manner and at comparable rates as under the Company's 401(k) Plan.

(5)	Mr. Sachse served as the Company's Chief Innovation and Business Development Officer during fiscal 2015. Effective as of the beginning of fiscal 2016, the Board elected him to the position of Chief Growth Officer.

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(1)

The Named Executives are eligible for an annual cash incentive award under our Incentive Plan, which is deemed a "non-equity incentive plan" under SEC rules. The plan provides that the Named Executives are eligible for an annual incentive award only if EBIT is positive. EBIT is defined to exclude the effects of asset impairments, restructurings, acquisitions, divestitures, other unusual or infrequently occurring items, store closing costs, unplanned material tax law changes and/or assessments and the cumulative effect of tax or accounting changes, as determined in accordance with generally accepted accounting principles, as applicable. Under the Incentive Plan, the maximum award a Named Executive may receive for fiscal 2015 is 0.45% of EBIT, or $10.120 million, for Mr. Lundgren and 0.25% of EBIT, or $5.622 million, for each of the other Named Executives, subject in all instances to the Incentive Plan's per-person maximum of $7 million. The CMD Committee may exercise negative discretion to reduce the maximum awards based on the annual incentive award opportunity established for each Named Executive under the Incentive Plan. For a more detailed discussion of the Incentive Plan, see the "Annual Incentive" discussion in "Compensation Discussion & Analysis - Fiscal 2015 Compensation and Analysis."

(2)

The Named Executives received a grant of performance-based restricted stock units ("PRSU") on March 27, 2015. The PRSUs vest over a three-year performance period covering fiscal years 2015-2017. The number of PRSUs earned may range from 0% to 150% of the Target award opportunity based on performance against average EBITDA margin, average ROIC and relative TSR objectives, and subject to attainment of a minimum cumulative EBITDA of $8.5 billion over the three-year performance period. PRSUs that are earned will be paid out as shares of Macy's common stock. Dividends, if any, paid on the Company's common stock will be credited to the Named Executives' PRSU accounts as additional restricted stock units and will be paid out as shares of Macy's common stock at the end of the three-year performance period only to the extent that the underlying PRSUs to which the dividends relate are earned. See the "Performance-Based Restricted Stock Units" discussion in "Compensation Discussion & Analysis - Fiscal 2015 Compensation and Analysis - Long-term equity compensation" and the "Restricted Stock and Restricted Stock Units" discussion in the narrative below.

(3)	The numbers reflected in this column represent the number of stock options granted to the Named Executives in fiscal 2015.

(4)	Stock options were valued as of the grant date using the Black-Scholes option pricing model in accordance with ASC Topic 718, using the following assumptions:

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*	Straight-line interpolation will apply to performance levels between the ones shown.

•

EBITDA is defined as earnings before interest, taxes, depreciation and amortization, which is equal to the sum of operating income and depreciation and amortization as reported in our audited financial statements, adjusted to eliminate the effects of asset impairments, restructurings, acquisitions, divestitures, other unusual or infrequently occurring items, store closing costs, unplanned material tax law changes and/or assessments and the cumulative effect of tax or accounting changes, as determined in accordance with generally accepted accounting principles, as applicable.

•	EBITDA margin is defined as EBITDA divided by Net Sales (with net sales being adjusted to exclude certain items that are included in externally reported sales under GAAP, including licensed department income, shipping and handling fees and sales to third party retailers, and to account for unplanned store closings).

•

ROIC is defined as EBITDAR divided by Total Average Gross Investment. EBITDAR is equal to the sum of EBITDA plus net rent expense (rent expense as reported in our audited financial statements less the deferred rent amortization related to contributions received from landlords). Total Average Gross Investment is equal to the sum of gross property, plant and equipment, capitalized value of non-capitalized leases, working capital - which includes receivables, merchandise inventories, prepaid expenses and other current assets - offset by merchandise accounts payable and accounts payable and accrued liabilities, and other assets (each as reported in our audited or unaudited financial statements).

•

TSR is defined as the change in the value of our common stock over the three-year performance period, taking into account both stock price appreciation and the reinvestment of dividends. The beginning and ending stock prices will be calculated based on a 20-day average stock price. Relative TSR is the percentile rank of our TSR compared to the TSR of our executive compensation peer group over the performance period. The executive compensation peer group consists of the following 12 companies: Bed, Bath & Beyond, Dillard's, Gap, J.C. Penney, Kohl's, L Brands, Nordstrom, Ross Stores, Sears Holdings, Target, TJX Companies and Walmart.

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(2)	Target number of PRSUs that vest following the conclusion of the three-year (fiscal 2014-2016) performance period, subject to the satisfaction of performance criteria. See the “Restricted Stock and Restricted Stock Units” discussion in the narrative following the 2015 Grants of Plan-Based Awards table.

(3)

Target number of PRSUs that vest following the conclusion of the three-year (fiscal 2015-2017) performance period, subject to the satisfaction of performance criteria. See the “Restricted Stock and Restricted Stock Units” discussion in the narrative following the 2015 Grants of Plan-Based Awards table and the “Performance-Based Restricted Stock Units” discussion in “Compensation Discussion & Analysis - Fiscal 2015 Compensation and Analysis - Long-term equity compensation.”

(1)

The amounts “realized” from option exercises reflect the appreciation on the date of exercise (based on the excess of the fair market value of the shares on the date of exercise over the exercise price). However, because the Named Executives may keep the shares they acquire upon the exercise of the option (or sell them at different prices), these amounts do not necessarily reflect cash actually realized upon the exercise of those options.

(2)	The number of shares includes time-based restricted stock units that vested on March 23, 2015 in the case of Mr. Gennette and Mr. Sachse and PRSUs that were earned as of the end of the fiscal 2013-2015 performance period, as follows:

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(3)

Restricted stock units were valued based on the closing price of the common stock on their March 23, 2015 vesting date ($65.64). The value of the PRSU awards are presented as of the date of the certification of related performance results, and not as of the date the awards were granted. The PRSUs were valued at $43.43 per share, which was the closing price of our common stock on February 26, 2016, the date that the CMD Committee certified the performance results for the PRSUs.

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•	an opening cash balance for participants in the plan at December 31, 1996, equal to the lump sum present value, using stated actuarial assumptions, of the participant's accrued normal retirement benefit earned at December 31, 1996, under the applicable predecessor pension plan;

•	pay credits (credited annually, a percentage of eligible compensation generally based on length of service); and

•	interest credits (credited quarterly, based on the 30-Year Treasury Bond rate for the November prior to each calendar year, with a guaranteed minimum rate of 5.25% annually).

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(1)	The amounts in this column associated with the DCP are reported as compensation for fiscal 2015 in the "Salary" and/or "Non-Equity Incentive Plan Compensation" columns of the 2015 Summary Compensation Table.

(2)	The amounts in this column associated with the DCP represent the Company's matching contributions and are included in the 2015 Summary Compensation Table under the "All Other Compensation" column for fiscal 2015. These amounts will be credited to the participants' accounts in March 2016.

(3)	The amounts reflected in this column represent deemed investment earnings or losses from voluntary deferrals and Company contributions, as applicable. These amounts are not included in the 2015 Summary Compensation Table because the plans do not provide for above-market or preferential earnings.

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(4)	A portion of the compensation deferred by Mr. Gennette under the EDCP is deferred as stock credits and a portion is deferred as cash credits. The portion of the aggregate balance that is attributable to his contributions under the EDCP was deferred in years prior to those reported in the 2015 Summary Compensation Table.

•	a cash severance payment (generally paid in the form of a lump sum) that will be equal to two times the sum of:

•	his or her base pay (at the higher of the rate in effect at the change in control or the rate in effect at termination) and

•	the average annual incentive award (if any) received for the three full fiscal years preceding the change in control; plus

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•	a lump sum payment of an annual incentive award for the year of termination, at target, prorated to the date of termination (this feature applies to all executives in the Incentive Plan); plus

•	release of any restrictions on restricted stock or restricted stock units, including performance-based awards, upon termination following the change in control; plus

•	acceleration of any unvested stock options upon termination following the change in control (this feature applies to all participants with stock options granted under the 2009 Omnibus Plan in fiscal 2010 and thereafter) or upon the change in control (this feature applies to all participants with stock options granted under the 1995 Equity Plan or the 1994 Stock Plan prior to fiscal 2010); plus

•	a lump sum payment of all deferred compensation (this feature applies to all participants in the deferred compensation plans); plus

•	payment of all retirement, supplementary retirement and 401(k) benefits upon termination or retirement in accordance with any previously selected distribution schedule (this feature applies to all participants in the retirement, supplementary retirement and 401(k) plans); plus

•	a retiree discount for life if at least 55 years of age with 15 years of vesting service at termination (this feature applies generally to all associates).

•	a person has become the beneficial owner of securities representing 30% or more of our combined voting power; or

•	individuals who, on the effective date of the CIC Plan, constitute our directors or whose election as a director after such effective date was approved by at least two-thirds of the directors as of the effective date cease for any reason to constitute at least a majority of the Board; or

•

consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of our assets and, as a result of or immediately following such merger, consolidation, reorganization, sale or transfer, less than a majority of the voting power of the other corporation immediately after the transaction is held in the aggregate by the holders of the voting stock of Macy's immediately prior to the transaction; or

•	shareholders approve a complete liquidation or dissolution of the Company.

•	a material diminution in the executive's base compensation; or

•	a material diminution in the executive's authority, duties or responsibilities; or

•	a material change in the geographic location at which the executive must perform services to the Company; or

•	any other action or inaction that constitutes a material breach by us of an agreement under which the executive provides services.

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•	the executive's employment terminated January 30, 2016;

•	the executive's salary continues as it existed on January 30, 2016;

•	the CIC Plan applies; and

•	the stock price for our common stock is $40.41 per share (the closing price for Macy's stock on the last business day of fiscal 2015).

(1)	Because Mr. Lundgren is over age 62, his unvested stock options would continue to vest following a voluntary termination or an involuntary termination without cause pursuant to the retirement provisions of his stock option agreements.

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I.	Authority to Approve Non-Audit Services

II.	Disclosure of Permitted Non-Audit Services in Outside Auditor's Engagement Letter

•	Whether the service is being performed principally for the Audit Committee;

•	The effects of the service, if any, on audit effectiveness or on the quality and timeliness of Macy's financial reporting process;

•	Whether the service would be performed by specialists (e.g., technology specialists) who ordinarily also provide recurring audit support;

•	Whether the service would be performed by outside audit personnel and, if so, whether it will enhance their knowledge of Macy's business and operations;

•	Whether the role of those performing the service (e.g., a role where neutrality, impartiality and auditor skepticism are likely to be subverted) would be inconsistent with the outside auditor's role;

•	Whether the outside audit firm's personnel would be assuming a management role or creating a mutuality of interest with Macy's management;

•	Whether the outside auditors, in effect, would be auditing their own numbers;

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•	Whether the project must be started and completed very quickly;

•	Whether the outside audit firm has unique expertise in the service;

•	Whether the service entails the outside auditor serving in an advocacy role for Macy's; and

•	The size of the fee(s) for the non-audit service(s).

III.	Annual Assessment of Policy

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