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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by Registrant  x                             Filed by a party other than the Registrant  ¨

Check the appropriate box:

Walgreens Boots Alliance, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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108 Wilmot Road

Deerfield, Illinois 60015

December 9, 2015

Dear Fellow Stockholders:

We are providing the enclosed proxy materials in connection with our 2016 Annual Meeting of Stockholders. The meeting will be held at Park Hyatt New York, 153 West 57^th Street, New York, NY 10019, on Wednesday, January 27, 2016 at 9:00 a.m., Eastern Time.

This is a time of dynamic and unprecedented change in the healthcare sector. Demographic trends, the ongoing digital revolution and the rise of the empowered consumer are creating exciting opportunities as the healthcare ecosystem seeks new strategies, efficiencies and solutions. The past year has been one of significant transition for our company, as we seek to serve at the forefront of innovating healthcare. In particular:

We also experienced changes in our Board during fiscal 2015, culminating in the addition of three new members – John A. Lederer, former president and chief executive officer of US Foods, Barry Rosenstein, managing partner of JANA Partners, and Leonard D. Schaeffer, Judge Robert Maclay Widney Chair and Professor, University of Southern California. They bring even further experience and energy to our company, a strong stockholder voice, and expertise in global retail and healthcare.

On behalf of the entire Board, we invite you to attend our Annual Meeting of Stockholders at its new location. The meeting’s format will be similar to last year, consisting of a brief procedural business meeting and short presentation. Closed captioning will be offered during the entire meeting, including questions and answers. If you are unable to attend the meeting in person, please join us online at walgreensbootsalliance.com to hear a live broadcast.

Your vote is very important. Whether or not you plan to attend the meeting, please vote at your earliest convenience by following the instructions in the notice of Internet availability of proxy materials or the proxy card you received in the mail.

Thank you for your continued trust and confidence in Walgreens Boots Alliance.

Sincerely,

JAMES A. SKINNER		STEFANO PESSINA
Executive Chairman		Executive Vice Chairman and Chief Executive Officer

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108 Wilmot Road

Deerfield, Illinois 60015

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held Wednesday, January 27, 2016

TO THE STOCKHOLDERS OF WALGREENS BOOTS ALLIANCE, INC.:

The 2016 Annual Meeting of Stockholders (the “Annual Meeting”) of Walgreens Boots Alliance, Inc., a Delaware corporation (the “Company”), will be held:

The Annual Meeting is being held for the following purposes:

Only stockholders of record at the close of business on November 30, 2015 are entitled to vote at the Annual Meeting or any adjournments thereof.

Stockholders are cordially invited to attend the Annual Meeting. If you plan to attend the meeting, you must have an admission ticket and follow the admission procedures described on page 3 of the Proxy Statement.

To vote your shares, please follow the instructions in the notice of Internet availability of proxy materials or the proxy card you received in the mail. If you vote by telephone or via the Internet, you need not return a proxy card. You may revoke your proxy at any time before your shares are voted at the meeting by notifying the Corporate Secretary in writing or by validly submitting another proxy by telephone, Internet or mail. If you are present at the meeting, you may vote your shares in person, which will supersede your proxy. If you hold shares through a broker or other custodian, please check the voting instructions provided to you by that broker or custodian.

Your vote is important. Whether or not you plan to attend the Annual Meeting in person, please vote at your earliest convenience. Your vote before the Annual Meeting will ensure representation of your shares at the Annual Meeting even if you are unable to attend.

December 9, 2015

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Proxy Statement – Summary

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

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Questions and Answers about the Proxy Materials and the Annual Meeting

Who is Walgreens Boots Alliance, Inc.?

Walgreens Boots Alliance, Inc. (“WBA”), a Delaware corporation, is the successor to Walgreen Co. (“Walgreens”), an Illinois corporation, following completion of the holding company reorganization approved by Walgreens shareholders on December 29, 2014. Upon consummation of the reorganization merger on December 31, 2014, outstanding shares of Walgreens common stock were converted automatically into shares of WBA common stock on a one-for-one basis, and WBA became the parent holding company of Walgreens (the “Reorganization”). Following completion of the Reorganization, WBA completed the acquisition of the remaining 55% of Alliance Boots GmbH (“Alliance Boots”) that it did not previously own (the “Second Step Transaction”) in exchange for £3.133 billion in cash and 144,333,468 shares of WBA common stock.

References herein to the “Company” refer to WBA from and after the effective time of the Reorganization on December 31, 2014 and, prior to that time, to its predecessor Walgreens, except as otherwise indicated or the context otherwise requires.

Why am I receiving these materials?

The Company has distributed these materials beginning on or about December 9, 2015 to all stockholders of record as of the close of business on November 30, 2015 (the “Record Date”) in connection with the Company’s solicitation of proxies for use at the Company’s 2016 Annual Meeting of Stockholders (the “Annual Meeting”), to be held at Park Hyatt New York, 153 West 57th Street, New York, NY 10019, on Wednesday, January 27, 2016, at 9:00 a.m. Eastern Time. This proxy statement (the “Proxy Statement”)

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describes the business that will be transacted at the Annual Meeting and how you can vote your shares. References in this Proxy Statement to the “Annual Meeting” also refer to any adjournments of the Annual Meeting.

How may I receive proxy materials?

The Company is again using the Securities and Exchange Commission’s (the “SEC’s”) “e-proxy” rule that allows companies to furnish their proxy materials over the Internet instead of mailing printed copies of the proxy materials to each stockholder. As a result, the Company is mailing to most of its stockholders a notice about the Internet availability of the proxy materials (the “Notice of Internet Availability”) that contains instructions on how to access this Proxy Statement, the accompanying notice of Annual Meeting and the Company’s Annual Report to Stockholders for fiscal 2015 (the “Annual Report”) online. If you received the Notice of Internet Availability by mail, you will not automatically receive a printed copy of the proxy materials in the mail. Instead, the Notice of Internet Availability instructs you on how to access and review all of the important information contained in the proxy materials and how you may submit your proxy. The Notice of Internet Availability also contains instructions on how stockholders may, if desired, request a printed copy of these proxy materials.

Stockholders who do not receive the Notice of Internet Availability will receive a printed copy of these proxy materials by mail unless they have previously requested electronic delivery. The Company is providing notice of the availability of those materials by e-mail to those stockholders who have previously elected to receive the proxy materials electronically. The email contains a link to the website where those materials are available and a link to the proxy voting website.

Who can attend the Annual Meeting?

Only stockholders of the Company as of the Record Date, their authorized representatives and guests of the Company may attend the Annual Meeting. To attend the meeting in person, you will need an admission ticket or an account statement showing your ownership of WBA stock as of the Record Date, and a government-issued photo identification. An admission ticket is included with the proxy materials if you received a printed copy of the proxy materials. A Notice of Internet Availability in your name can also serve as your admission ticket. Please note that this is a procedural business meeting, and item samples will not be offered. Seating is limited and will be on a first-come, first-served basis. Backpacks and suitcases are not permitted in the meeting, and distribution of any materials is prohibited. Any parking cost is the attendee’s responsibility.

Who is entitled to vote?

Only stockholders of record of WBA common stock at the close of business on the Record Date are entitled to notice of, and to vote at, the Annual Meeting. As of that date, 1,085,656,081 shares of WBA common stock were outstanding. Stockholders have cumulative voting rights in the election of directors and one vote per share on all other matters. Cumulative voting allows a stockholder to multiply the number of shares owned by the number of directors to be elected and to cast an equal number of votes for each of the 11 nominees, distribute their votes among as many nominees as they choose, or cast all their votes for one nominee.

Stockholders of Record.  If your shares are registered directly in your name with the Company’s transfer agent, you are considered the stockholder of record with respect to those shares, and a Notice of Internet Availability or a set of proxy materials is being provided to you directly by the Company. As the stockholder of record, you have the right to grant your voting proxy directly to the individuals listed on the proxy card or to vote in person at the Annual Meeting. If you are a stockholder of record and choose to cumulate your votes in the election of directors, you must notify the Company’s Corporate Secretary in writing prior to the Annual Meeting or, if you vote in person at the Annual Meeting, notify the chair of the Annual Meeting prior to the commencement of voting.

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“Street Name” Stockholders.    If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held in street name and the Notice of Internet Availability or proxy materials were forwarded to you by your broker or nominee. As the beneficial owner, you have the right to direct your broker or nominee how to vote your shares. Beneficial owners are also invited to attend the Annual Meeting. Since you are not the stockholder of record, however, you may not vote your shares in person at the Annual Meeting unless you follow your broker’s procedures for obtaining a legal proxy. If you hold shares beneficially through a broker, bank or other nominee and choose to cumulate your votes in the election of directors, you should contact your broker, bank or nominee.

What proposals are being voted on at the Annual Meeting? What are the Board’s voting recommendations?

The proxy holders intend to vote each proxy received by them in accordance with the direction of the stockholder completing the proxy. If you grant a proxy to allow your shares to be represented at the Annual Meeting, but do not indicate how your shares should be voted on one or more matters listed above, then the proxies will vote your shares as the Board recommends for those matters. If you grant a proxy to allow your shares to be represented at the Annual Meeting with no further instructions on the election of directors, the proxy holders have discretionary authority to cumulate votes and to allocate such votes among some or all of the nominees recommended by the Board, although they have no present intention of doing so.

Certain stockholders have notified the Company of their intent to propose a resolution at the Annual Meeting requesting that the Compensation Committee of the Board (the “Compensation Committee”) “prepare a report assessing the feasibility of integrating sustainability metrics into the performance measures of senior executives under the Company’s compensation incentive plans,” which is referred to herein as the “Floor Proposal.” The Floor Proposal was not submitted under Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the Floor Proposal is not included in this Proxy Statement. If the Floor Proposal is presented at the Annual Meeting, the proxy holders will have, and intend to exercise, discretionary voting authority under Rule 14a-4(c) under the Exchange Act with respect to the Floor Proposal and intend to exercise such discretion to vote AGAINST such proposal.

Other than the matters listed above, the Company knows of no other matters to be presented at the Annual Meeting. If any other matters are properly presented at the Annual Meeting, the proxies intend to vote your shares in accordance with their best judgment.

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How do I vote?

Stockholders of Record:  If you are a stockholder of record and you received a printed copy of the proxy materials by mail, you may vote in person at the Annual Meeting or by one of the following methods:

Please refer to the specific instructions set forth on the proxy card you received.

If you are a stockholder of record and you received a Notice of Internet Availability, you may vote in person at the Annual Meeting, by accessing the secure Internet website registration page identified on the Notice of Internet Availability and following the instructions, or by mail or telephone if you request a printed copy of the proxy materials by calling the toll-free telephone number set forth on the Notice of Internet Availability. Please refer to the specific instructions set forth in the Notice of Internet Availability you received.

Please note that the Internet and telephone voting facilities for stockholders of record will close at 11:59 p.m. Eastern Time on January 26, 2016. The individuals named as proxies on the proxy card will vote your shares in accordance with your instructions.

Street Name Stockholders:  If your shares are held by a broker, bank or other nominee, you should have received instructions on how to vote or instruct the broker to vote your shares from your broker, bank or other nominee. Please follow their instructions carefully. If you give the broker voting instructions, your shares will be voted as you direct. Please note that brokers may not vote your shares on the election of directors, on compensation matters or on stockholder proposals in the absence of your specific instructions as to how to vote. Please provide your voting instructions so your vote can be counted.

Street name stockholders may generally vote by one of the following methods:

If you are a stockholder of record and choose to cumulate your votes in the election of directors, you must notify the Company’s Corporate Secretary in writing prior to the Annual Meeting or, if you vote in person at the Annual Meeting, notify the chair of the meeting prior to the commencement of

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voting. If you hold shares beneficially through a broker, bank or other nominee and wish to cumulate votes, you should contact your broker, bank or nominee.

If my shares are held in street name, how will my shares be voted if I do not return voting instructions to my broker?

If you hold your shares in street name through a brokerage account and you do not submit voting instructions to your broker, your broker may vote your shares in its discretion on matters designated as routine under applicable rules and regulations. However, a broker cannot vote shares held in street name on matters designated as non-routine, unless the broker receives voting instructions from the beneficial owner. If you hold your shares in street name and do not provide voting instructions to your broker, your broker will have discretion to vote your shares only on proposal No. 3, because the ratification of the Company’s independent registered public accounting firm is considered a routine matter. Each of the other items to be submitted for a vote of stockholders at the Annual Meeting is considered non-routine under applicable rules and regulations. “Broker non-votes” occur when brokerage firms return proxies for which no voting instructions have been received from beneficial owners and the broker does not have discretionary authority to vote on the proposal.

What constitutes a quorum at the Annual Meeting?

A majority of the outstanding shares entitled to vote, represented at the Annual Meeting in person or by proxy, constitutes a quorum, which is the minimum number of shares that must be present or represented by proxy at the Annual Meeting to transact business. Abstentions and broker non-votes are counted as shares represented at the meeting for purposes of determining a quorum. Once a share is represented for any purpose at the Annual Meeting, it will be deemed present for quorum purposes for the remainder of the meeting (including any meeting resulting from an adjournment of the Annual Meeting, unless a new record date is set).

How many votes are needed to have the proposals pass?

Proposal No. 1 (Election of Directors):  In an uncontested election, the affirmative vote of a majority of the votes cast for the election of directors is required to elect directors at an Annual Meeting. The election of directors at the Annual Meeting is an uncontested election. This means, with respect to the election of directors at the Annual Meeting (Proposal No. 1), that the number of votes “for” a director’s election must exceed 50% of the number of votes cast with respect to that director’s election. In a contested election, where the number of nominees for director exceeds the number of directors to be elected, the required vote would be a plurality of the votes cast for the election of directors.

Other Proposals:  If a quorum is present, the affirmative vote of a majority of the shares represented in person or by proxy at the Annual Meeting and entitled to vote on the matter is required to approve each of the other proposals, including the Floor Proposal if properly presented, to be voted on at the Annual Meeting.

How are the votes counted?

With respect to each proposal, only proxies and ballots that indicate votes “For,” “Against” or “Abstain” on the proposals or that provide the designated proxies with the right to vote in their judgment and discretion on the proposals are counted to determine the number of shares present and entitled to vote. If you elect to abstain, the abstention will have the same effect as an “against” vote on these proposals. Shares constituting broker non-votes are not counted as shares represented in person or by proxy and entitled to vote on a non-routine matter and, therefore, are not counted for the purpose of determining whether stockholders have approved the proposal.

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What happens if a director does not receive a majority of the votes cast?

If a nominee for director who was in office prior to the election at the Annual Meeting is not elected by a majority of votes cast, the director must promptly tender his or her resignation from the Board, and the Nominating and Governance Committee of the Board (the “Nominating and Governance Committee”) will make a recommendation to the Board about whether to accept or reject the resignation or whether to take other action. The Board, excluding the director in question, will act on the recommendation of the Nominating and Governance Committee and publicly disclose its decision and its rationale within 90 days from the date the election results are certified.

Can I change my vote after I return the proxy card, or after voting by telephone or electronically?

If you are a stockholder of record, you can revoke your proxy at any time before it is voted at the meeting by taking one of the following three actions:

If you are a beneficial owner of shares, you may submit new voting instructions by timely contacting your bank, broker or other holder of record in accordance with that entity’s procedures. You may also vote in person at the Annual Meeting if you obtain a legal proxy.

All shares that have been properly voted and not revoked will be voted at the Annual Meeting. The proxy confers discretionary authority to the persons named in the proxy, or their substitutes, to vote on any other business that may properly come before the meeting.

Does the Company have a “proxy access” by-law?

Yes. On October 14, 2015, the Company amended its by-laws to include a proxy access provision. Under the Company’s amended and restated By-laws, a stockholder, or a group of up to 20 stockholders, owning 3% or more of the Company’s outstanding stock continuously for at least three years, may nominate and include in the Company’s proxy materials director nominees constituting up to 20% of the Board (rounding down), provided that such stockholder(s) and nominee(s) satisfy the disclosure and other requirements set forth in the amended and restated By-laws. In order to use this proxy access provision, stockholders are required to hold shares until the date of the applicable annual meeting (but not beyond), and third party compensation arrangements with nominees are permitted if disclosed in advance to the Company. The process for nominating candidates pursuant to this proxy access provision for the Company’s 2017 Annual Meeting of Stockholders, including the deadline for such nominations, is described under “Stockholder Proposals for the Next Annual Meeting” on page 93 of this Proxy Statement. The full text of the proxy access by-law can be found as an exhibit to the Current Report on Form 8-K filed by the Company with the SEC on October 16, 2015.

How do the Company Shareholders Agreement entered into in connection with the Alliance Boots transaction and the agreement with JANA Partners affect the Annual Meeting?

Company Shareholders Agreement.  On August 2, 2012, in connection with the Company’s acquisition of 45% of Alliance Boots, the Company, Kohlberg Kravis Roberts & Co. L.P. (“KKR”, and together with certain of its affiliates, the “KKR Investors”), Stefano Pessina (and together with certain of his affiliates, the “SP Investors”) and others receiving Company common stock in the transaction entered into a Shareholders’ Agreement (the “Company Shareholders Agreement”). Pursuant to the Company Shareholders Agreement, for so long as the SP Investors and the KKR Investors continue to

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meet certain common stock beneficial ownership thresholds and subject to certain other conditions, the SP Investors and the KKR Investors, respectively, are each entitled to designate a nominee for election to the Board. Stefano Pessina, Chief Executive Officer of the Company, is the designee of the SP Investors, and Dominic P. Murphy, a Partner of KKR, is the designee of the KKR Investors, and each is included in the Company’s slate of director nominees in Proposal No. 1. In addition, the SP Investors and KKR Investors have agreed, for so long as they each have the right to designate a nominee for election to the Board, subject to certain exceptions, to vote all of their Company shares in accordance with the Board’s recommendation on all matters submitted to a vote of Company stockholders. For a more detailed description of the Company Shareholders Agreement, see “—Board Composition and the Director Selection Process” and “Certain Relationships and Related Transactions—Equity Transactions Involving Alliance Boots and SAHL” below.

JANA Agreement.  On September 5, 2014, the Company and JANA Partners LLC (“JANA”) entered into the Nomination and Support Agreement (the “Nomination and Support Agreement”) pursuant to which, among other things, on September 5, 2014, Barry Rosenstein of JANA was appointed to the Board as the “JANA Designee” and on April 8, 2015, John A. Lederer was appointed to the Board as the “Additional Independent Director.” In addition, pursuant to the Nomination and Support Agreement, the Company nominated Mr. Rosenstein and Mr. Lederer for election to the Board at the 2015 Annual Meeting. Pursuant to the terms of the Nomination and Support Agreement, the nomination of Mr. Schaeffer at the 2015 Annual Meeting was mutually agreed upon between the Company and JANA (and Mr. Schaeffer is independent of both). Under the Nomination and Support Agreement, JANA is subject to certain standstill restrictions until the later of 45 days prior to the advance notice deadline for this upcoming Annual Meeting and 15 days after Mr. Rosenstein is no longer a member of the Board, subject to early termination of the standstill period in the event of an uncured material breach of the Nomination and Support Agreement by the Company. The standstill period is extended if the Company nominates Mr. Rosenstein at this upcoming Annual Meeting, and any successive Annual Meeting of Stockholders, and Mr. Rosenstein agrees to serve as a director nominee. As noted elsewhere in this Proxy Statement, the Company has included Mr. Rosenstein in the Company’s slate of director nominees in Proposal No. 1 for this upcoming Annual Meeting and Mr. Rosenstein has agreed to serve as a director nominee. During the standstill period, JANA is subject to customary standstill and voting obligations, including, among other things, that JANA and its affiliates and controlled associates will not acquire beneficial ownership of or an economic interest in more than 4.9% of the Company’s outstanding common stock or participate in a proxy solicitation, and will vote all voting securities which they are entitled to vote in favor of all incumbent directors nominated by the Board and in accordance with the recommendation of the Board on other matters (including each of the Proposals being voted on at the Annual Meeting), other than certain matters specified in the Nomination and Support Agreement.

Is my vote confidential?

Yes, any information that identifies a stockholder or the particular vote of a stockholder is kept confidential and will not be disclosed to the Company unless required by law or requested by you.

Who counts the votes?

Broadridge Financial Solutions, Inc. will tabulate the proxies and a representative of CT Hagberg LLC will act as the inspector of election. Each firm is independent of the Company.

How can I find out the voting results?

Preliminary voting results are expected to be announced at the Annual Meeting. Final voting results will be tallied by the inspector of election after the taking of the vote at the Annual Meeting. The Company will report final voting results in a Current Report on Form 8-K, which the Company is required to file with the SEC following the Annual Meeting.

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Who will pay for the costs involved in the solicitation of proxies?

The Company will bear the expenses incurred to solicit proxies. The Company will pay all costs of preparing, assembling, printing and distributing the proxy materials. Solicitation may be made by mail, facsimile, email, in person and by telephone. Officers, directors and employees of the Company may help solicit proxies for no additional compensation. The Company will, upon request, reimburse brokerage firms and other nominees or fiduciaries for their reasonable expenses incurred for forwarding solicitation material to beneficial owners of the Company’s common stock.

PROPOSAL 1

Election of Directors

There are 11 nominees identified below for election to the Board to hold office until the next Annual Meeting of Stockholders or until their successors are elected and qualified or any such director’s earlier death, resignation or removal. Should any nominee unexpectedly become unavailable for election, the Nominating and Governance Committee will recommend, and the Board will substitute (in accordance with the Company Shareholders Agreement in the case of nominees designated pursuant to such agreement), a replacement nominee, unless the Board instead chooses to reduce the number of directors serving on the Board. The proxy holders will vote all proxies received by them for any such replacement nominee. The Board does not anticipate that any nominee will be unable to serve.

Set forth below are the names, ages (as of December 1, 2015), principal occupations and other information about each of the director nominees. Also included is a description of the specific experience, qualifications, attributes and skills of each nominee that led the Board to conclude that each nominee is well-qualified to serve as a member of the Board and to make meaningful contributions to the Board’s oversight of the Company’s business and affairs. See “—Board Composition and the Director Selection Process” below for additional information on the process undertaken to select these nominees.

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The Board unanimously recommends that stockholders vote FOR the nominees set forth above. Proxies solicited by the Board will be so voted unless stockholders specify a contrary choice.

Board Composition and the Director Selection Process

Decisions regarding the structure and composition of the Board are of utmost importance in assuring a strong Board that is best suited to guide the Company in the future. The Nominating and Governance Committee periodically reviews and makes recommendations to the Board regarding the size, function, composition, structure and operation of the Board. In doing so, the Nominating and Governance Committee considers the results of the most recent Board and director evaluations, as well as the changing needs of the Company. Based on the Nominating and Governance Committee’s most recent assessment and recommendation, the Board determined that a size of 11 was optimal at this time.

The Nominating and Governance Committee is also charged with making a recommendation to the Board with respect to the director nominees for each Annual Meeting of Stockholders, including re-nomination of current directors and identifying new director candidates. In general, desired qualities to be considered include:

Experience:

Personal attributes:

When recommending to the full Board the specific slate of directors to be nominated for election at the Annual Meeting of Stockholders, the Nominating and Governance Committee reviews the qualifications and backgrounds of each nominee, as well as the overall composition of the Board to assure that Board composition is aligned with the changing needs of the Company. The Nominating and Governance Committee evaluates each individual in the context of the Board as a whole, with the objective of recommending for nomination a group of individuals that can best perpetuate the Company’s success and represent stockholder interests through the exercise of sound business judgment. As part of this evaluation, the Nominating and Governance Committee assesses whether the group of nominees is comprised of individuals with a diversity of perspectives, backgrounds and

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professional experiences that would enhance the Board’s success at achieving these goals. With regard to diversity among the group of nominees, the Board, in accordance with the Company’s Corporate Governance Guidelines, considers diversity in broad terms, including consideration of competencies, experience, geography, gender, ethnicity, race and age, with the goal of obtaining diverse perspectives, backgrounds and professional experiences. The Board also considers tenure, balancing the need for fresh perspective and insights against the benefits associated with some degree of Board continuity and the depth of knowledge about the Company that experienced directors develop over time. With respect to continuing non-employee directors, the Nominating and Governance Committee also focuses on continued independence, transactions that may present conflicts of interest, changes in principal business activities and overall contribution to the Board. Nominees may be suggested by directors, members of management, stockholders or a third-party firm engaged to recommend director candidates.

The Nominating and Governance Committee may engage a consulting firm to help identify candidates for director who meet the Company’s qualifications. Generally, the firm screens candidates against specific qualifications, develops profiles and prepares biographies of each candidate. The firm may also assist in the interview process. The Chairman of the Nominating and Governance Committee and/or the Chairman of the Board, acting on behalf of the full Board, extends the formal invitation to become a Board nominee.

In addition, the Company recently amended its By-laws to include a proxy access provision. Under the Company’s amended and restated By-laws, a stockholder, or a group of up to 20 stockholders, owning 3% or more of the Company’s outstanding stock continuously for at least three years, may nominate and include in the Company’s proxy materials director nominees constituting up to 20% of the Board (rounding down), provided that such stockholder(s) and nominee(s) satisfy the requirements set forth in the amended and restated By-laws.

Pursuant to the Company Shareholders Agreement, for so long as the SP Investors and the KKR Investors continue to meet certain common stock beneficial ownership thresholds and subject to certain other conditions, the SP Investors and the KKR Investors, respectively, are each entitled to designate a nominee for election to the Board at the Annual Meeting of Stockholders. Stefano Pessina is the designee of the SP Investors and Dominic P. Murphy is the designee of the KKR Investors. These designees, like all of the Company’s director nominees, are subject to election at each Annual Meeting of Stockholders. Pursuant to the Company Shareholders Agreement, the Board waived the retirement age requirement set forth in the Company’s Corporate Governance Guidelines with respect to Mr. Pessina upon his designation by the SP Investors as a nominee for election to the Board. The SP Investors and the KKR Investors, respectively, each are entitled to designate a replacement director to fill a vacancy resulting from the death, disability, removal or resignation of their prior designee, subject to the terms and conditions of the Company Shareholders Agreement. For additional information, see “Certain Relationships and Related Transactions—Equity Transactions Involving Alliance Boots and SAHL” below.

Pursuant to the Nomination and Support Agreement, Barry Rosenstein of JANA was appointed to the Board in September 2014 and was nominated for election to the Board at the 2015 Annual Meeting. Under the Nomination and Support Agreement, the Company and JANA agreed to cooperate to agree on another director recommended by JANA who is independent of both JANA and the Company and reasonably acceptable to the Company to appoint to the Board as promptly as practicable. Accordingly, in April 2015, JANA and the Company agreed to appoint John A. Lederer to the Board and Mr. Lederer was nominated for election to the Board at the 2015 Annual Meeting. Mr. Rosenstein and Mr. Lederer, like all of the Company’s director nominees, are subject to election at each Annual Meeting of Stockholders. Pursuant to the terms of the Nomination and Support Agreement, the nomination of Mr. Schaeffer for election to the Board at the 2015 Annual Meeting was mutually agreed upon between the Company and JANA (and Mr. Schaeffer is independent of both).

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The Board of Directors, Board Committees and Corporate Governance

Board Meetings

During fiscal 2015, the Board met in person and by telephone nine times. The independent and non-management directors meet in executive sessions in conjunction with each quarterly Board meeting. During the time that he served as non-executive chairman, Mr. Skinner presided at those sessions. Thereafter, Mr. Foote presided at these sessions as Lead Independent Director.

The Company’s Corporate Governance Guidelines state that directors are expected to attend the Annual Meeting of Stockholders and all meetings of the Board and the committees thereof on which they serve, unless prevented by unavoidable circumstances. Each director attended at least 75% of the aggregate number of meetings of the Board and the committees thereof on which he or she served during the periods for which he or she served. All of the directors then serving attended the Company’s Annual Meeting of Stockholders on May 28, 2015.

Director Independence

The Board believes that, as a matter of policy, at least two-thirds of the Company’s Board members should be independent. Accordingly, the Board conducts an annual review to determine whether each of its directors qualifies as independent. The Board has determined categorically that any relationship within the parameters set forth below will not impair the independence of a director:

In making independence determinations, the Board considers relationships involving directors and their immediate family members that may implicate the listing standards of The NASDAQ Global Select Market or other applicable law, and relies on information derived from Company records, questionnaires completed by directors and inquiries of other relevant parties.

For the directors and nominees for director identified herein as independent, the relationships reviewed by the Board as part of its most recent independence determinations included the Company’s commercial relationships with entities: (i) at which Board members then served as officers, including Bob Evans Farms, Inc. (Mr. Steven A. Davis, who resigned from the Board effective June 12, 2015), Health Evolution Partners (Dr. Brailer), Henry Ford Health System (Ms. Schlichting), Hertz Global Holdings, Inc. and The Hertz Corporation (Mr. Mark P. Frissora, who resigned from the Board effective April 1, 2015) and US Foods (Mr. Lederer); (ii) of which Board members or their immediate family members are controlling shareholders; and (iii) at which Board members then served as outside director, trustee or special advisor including the Chicago Transit Authority (Mr. Alejandro Silva, who retired from the Board as of the 2015 Annual Meeting), Experian plc (Ms. Babiak), HP Inc. (Mr. Skinner),

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Northwestern Memorial HealthCare (Mr. Foote), Quintiles Transnational Holdings Inc. (Mr. Schaeffer), Royal Mail Holdings plc (Ms. Babiak), and Restaurant Brands International (Mr. Lederer). The relationships with the entities noted above involved the Company’s purchase or sale of products and services in the ordinary course of business on arm’s-length terms and under circumstances that did not impair the relevant director’s independence under applicable law or listing standards. The aggregate amount in each case was within the Company’s categorical standard for commercial transactions described above. In each instance noted above, the Board concluded that the relationship did not impair the independence of the director. In addition, no director or nominee identified herein as independent or entity affiliated with such a director or nominee had a relationship with the Company whereby professional services were provided to the Company.

The Board also considered the amounts of the Company’s contributions to charitable institutions or other non-profit organizations for which certain directors serve as an officer, director or trustee, which in each case was within the categorical standard for contributions described above. In each instance, the Board concluded that the relationship did not impair the independence of the director.

Upon completion of its review, the Board determined that (i) Ms. Babiak, Dr. Brailer, Mr. Foote, Ms. Graham, Mr. Lederer, Mr. Rosenstein, Mr. Schaeffer and Ms. Schlichting are independent, (ii) that prior to his appointment as Executive Chairman on January 9, 2015, Mr. Skinner was independent, and (iii) that, during the time each served as a director, Mr. Davis, Mr. Frissora, Mr. Alan G. McNally (who retired from the Board as of the 2015 Annual Meeting) and Mr. Silva were independent, in each case under the applicable listing standards of The NASDAQ Global Select Market, as well as the Company’s standards.

Committees

During fiscal 2015, in addition to the standing Compensation Committee and the standing Nominating and Governance Committee, the Board had a standing Audit Committee (the “Audit Committee”) and a standing Finance Committee (the “Finance Committee”). Members of the Audit Committee, Compensation Committee and Nominating and Governance Committee are each required to be independent in accordance with applicable rules and regulations. The Board has determined that each member of the Audit Committee, Compensation Committee, and Nominating and Governance Committee is independent as defined in the Company’s independence standards, the rules of the SEC (in the case of the Audit Committee), and applicable stock exchange listing standards.

The Board may form special or ad hoc committees from time to time to assist the Board in fulfilling its responsibilities with respect to matters that are the subject of such special or ad hoc committee’s mandate. In December 2014, the Board established an ad-hoc search committee (the “CEO Search Committee”) with a mandate to identify a permanent Chief Executive Officer of the Company to succeed Mr. Gregory D. Wasson, who retired as the Company’s Chief Executive Officer effective on January 9, 2015. The CEO Search Committee was comprised of Mr. Skinner, who chaired the CEO Search Committee, as well as Dr. Brailer, Mr. Foote, Mr. Pessina, Mr. Rosenstein and Ms. Schlichting. The CEO Search Committee functioned until July 8, 2015, when Mr. Pessina was named the Company’s Chief Executive Officer, and the CEO Search Committee was then disbanded.

Audit Committee

The Audit Committee met nine times during fiscal 2015. The Audit Committee is composed of Ms. Babiak (Chair), Dr. Brailer, Ms. Graham and Ms. Schlichting. Mr. Frissora joined the Audit Committee on January 15, 2015 and served until his resignation from the Board on April 1, 2015. Ms. Graham joined the Audit Committee upon Mr. Silva’s retirement from the Board as of the 2015 Annual Meeting.

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Each member of the Audit Committee meets the current financial literacy requirements of The NASDAQ Global Select Market. The Board has determined that each of Mses. Babiak, Graham and Schlichting and Dr. Brailer meets the definition of audit committee financial expert under the rules promulgated by the SEC.

The Audit Committee selects the Company’s independent registered public accounting firm and assists in the oversight of matters relating to the Company’s financial reporting processes and systems. Specific tasks include overseeing the quality and integrity of the Company’s financial statements, the Company’s compliance with certain regulatory requirements, and internal accounting controls. The Audit Committee also reviews the performance of the Company’s outside auditor and the internal audit function, and oversees policies associated with financial risk assessment and risk management.

Compensation Committee

The Compensation Committee met six times during fiscal 2015. The Compensation Committee is composed of Ms. Schlichting (Chair), Mr. Foote, Mr. Lederer, Mr. Rosenstein and Mr. Schaeffer. Ms. Schlichting succeeded Mr. Foote as Chair of the Compensation Committee on January 15, 2015 and Mr. Rosenstein joined the Compensation Committee on that date. Mr. Davis served on the Compensation Committee until his resignation from the Board on June 12, 2015. Ms. Graham served on the Compensation Committee until July 8, 2015 and Mr. Schaeffer joined the Compensation Committee on that date. Mr. Lederer joined the Compensation Committee on September 1, 2015.

The Compensation Committee determines the various elements of executive compensation and oversees executive succession planning. The Compensation Committee maintains authority and responsibility for the administration of the Company’s executive compensation programs, including base salaries, the annual performance-based Management Incentive Plan, the Company’s 2013 Omnibus Incentive Plan (as amended, the “Omnibus Incentive Plan”) used to provide long-term incentive awards, and certain executive deferred compensation plans and perquisites. The Compensation Committee also reviews management’s proposals regarding certain employee benefit plans and makes recommendations regarding such proposals to the Board.

The Compensation Committee consists solely of non-management directors who are independent under applicable securities laws and stock exchange rules. The Compensation Committee is supported in its work by its outside independent compensation consultant, Mercer LLC (“Mercer”), as well as the Company’s Human Resources department.

Mercer provides the Compensation Committee with information regarding market compensation and practices, assists the Compensation Committee in the review and evaluation of such compensation and practices, and advises the Compensation Committee on compensation decisions, particularly with respect to the compensation of the Company’s Chief Executive Officer. Mercer also assists the Nominating and Governance Committee in the review and evaluation of director compensation and practices.

Mercer’s fees for executive and director compensation consulting services provided to the Compensation Committee in fiscal 2015 were $276,100. In addition, the Company paid Mercer approximately $50,000 for manuals and compensation survey data in fiscal 2015. Mercer does not currently provide any additional services to the Company. Mercer is a wholly-owned subsidiary of Marsh & McLennan Companies (“MMC”). MMC and its affiliates other than Mercer provided certain services not related to executive and director compensation, primarily insurance brokerage and professional fees, to the Company and its affiliates in fiscal 2015 and received compensation totaling approximately $9,866,750, excluding insurance premiums that are paid through MMC to insurance carriers on behalf of the Company and its affiliates. These non-compensation related services and fees are not subject to the Compensation Committee’s review or approval.

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The Compensation Committee has reviewed and considered (1) the services Mercer performed for the Compensation Committee during fiscal 2015, (2) the non-compensation related services performed by MMC and its affiliates for the Company and its affiliates in fiscal 2015, (3) the relationships among the Company, Mercer and MMC, and (4) the quality and objectivity of the services Mercer consultants provided to the Compensation Committee. The Compensation Committee noted that the Mercer consultants providing service to the Compensation Committee do not market or sell to the Company or its affiliates the non-compensation related services performed by MMC, and those consultants receive no incentive or other compensation based on the fees paid by the Company and its affiliates for these other services. In addition, Mercer’s professional standards prohibit its consultants from considering any other relationships Mercer or any of its affiliates may have with the Company and its affiliates in rendering advice and recommendations to the Compensation Committee. Based on its review, the Compensation Committee has concluded that the advice it receives from Mercer is objective and not influenced by MMC’s other relationships with the Company or its affiliates.

For additional information regarding the operation of the Compensation Committee and the role of outside compensation consultants, see “Executive Compensation—Compensation Discussion and Analysis” below.

Finance Committee

The Finance Committee met five times during fiscal 2015. The Finance Committee is composed of Dr. Brailer (Chair), Ms. Babiak, Mr. Lederer, Mr. Murphy and Mr. Rosenstein. Mr. Frissora, Ms. Graham and Mr. Pessina served on the Finance Committee until January 15, 2015, and Mr. Silva joined the Finance Committee on that date. Mr. McNally and Mr. Silva served on the Finance Committee until their retirement from the Board as of the 2015 Annual Meeting. Dr. Brailer became the Chair of the Finance Committee on January 15, 2015, succeeding Mr. Frissora. Mr. Lederer joined the Finance Committee on April 8, 2015.

The Finance Committee reviews the financial policies, requirements and practices of the Company and makes recommendations to the Board concerning such matters. Specific responsibilities include reviewing the Company’s capital allocation, capital structure, dividend policy, capital expenditures and liquidity.

Nominating and Governance Committee

The Nominating and Governance Committee met five times during fiscal 2015. The Nominating and Governance Committee is composed of Mr. Foote (Chair), Ms. Graham, Mr. Rosenstein and Mr. Schaeffer. Mr. Silva served on the Nominating and Governance Committee until January 15, 2015, and Ms. Graham and Mr. Rosenstein joined the Nominating and Governance Committee on that date. Mr. Foote succeeded Mr. Davis as Chair of the Nominating and Governance Committee on January 15, 2015. Mr. Frissora served on the Nominating and Governance Committee until his resignation from the Board on April 1, 2015, Mr. McNally served on the Nominating and Governance Committee until his retirement from the Board as of the 2015 Annual Meeting, and Mr. Davis served on the Nominating and Governance Committee until his resignation from the Board on June 12, 2015. Mr. Schaeffer joined the Nominating and Governance Committee on July 8, 2015.

The Nominating and Governance Committee considers matters related to corporate governance, makes recommendations to the Board regarding the Company’s Corporate Governance Guidelines and various elements of non-employee director compensation, develops general criteria regarding the qualifications and selection of Board members, and recommends candidates for election to the Board. The Nominating and Governance Committee also oversees the periodic evaluation of the effectiveness of the Board and its committees and management and reviews the succession plans of the Board and its committees.

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Governance Policies

The Board has adopted a written charter for each of its standing committees, as well as Corporate Governance Guidelines that address the Board’s composition and governance. Each committee of the Board reviews its charter annually and submits any recommended changes to the Board. The Board has also adopted a Code of Conduct and Business Ethics that applies to all of the Company’s employees, officers and directors, as well as a Code of Ethics for CEO and Financial Executives that applies to and has been signed by the Chief Executive Officer, the Global Chief Financial Officer, and the Global Controller. These materials can be found on the Company’s website at investor.walgreensbootsalliance.com, and may be obtained in printed hardcopy form by writing: Walgreens Boots Alliance, Inc., Attn: Investor Relations, Mail Stop #1833, 108 Wilmot Road, Deerfield, Illinois 60015. The Company intends to promptly disclose on its website in accordance with applicable rules required disclosure of changes to or waivers, if any, of the Code of Conduct and Business Ethics or the Code of Ethics for CEO and Financial Executives for directors and executive officers.

Consideration of Director Candidates for Next Year’s Annual Meeting

The Nominating and Governance Committee welcomes stockholder suggestions of director candidates for its consideration. Stockholders should write to the Nominating and Governance Committee, Walgreens Boots Alliance, Inc., Attention: Corporate Secretary, 108 Wilmot Road, Deerfield, Illinois 60015. Stockholders should provide the candidate’s name, biographical data, qualifications and the candidate’s written consent to being named as a nominee in the Company’s proxy statement and to serve as a director, if elected. If selected by the Nominating and Governance Committee, candidates will be required to satisfy any additional requirements of the Nominating and Governance Committee and the Company’s By-laws.

The SP Investors and the KKR Investors may each designate a director nominee, subject to the terms and conditions of the Company Shareholders Agreement discussed above under “—Board Composition and the Director Selection Process.” Other stockholders can nominate candidates for election as a director, including pursuant to the Company’s recently-adopted proxy access by-law, by following the procedures set forth in the Company’s By-laws. A stockholder wishing to directly nominate a director candidate must notify the Corporate Secretary of the Company in writing at the address and in accordance with the deadline specified under “Stockholder Proposals for the Next Annual Meeting” below. All stockholder proposals must be in proper written form and must meet the detailed disclosure requirements set forth in the Company’s By-laws, including a description of the proposal, the relationship between the proposing stockholder and the underlying beneficial owner, if any, and such parties’ stock holdings and derivative positions in Company securities. The Company’s By-laws also require that stockholder proposals concerning nomination of directors provide additional disclosure, including such information WBA deems appropriate to ascertain the nominee’s qualifications to serve on the Board, disclosure of compensation arrangements between the nominee, the nominating stockholder and the underlying beneficial owner, if any, and any other information required to comply with the proxy rules and applicable law. If you would like a copy of these provisions, please contact the Company’s Corporate Secretary at the above address, or access the Company’s By-laws filed as an exhibit to the Form 8-K filed by the Company on October 16, 2015. Failure to comply with the Company’s By-law procedures and deadlines may preclude presentation and consideration of the matter or nomination of the applicable candidate for election at the 2017 Annual Meeting.

Communication and Stockholder Engagement

The Board and senior management are interested in investor perspectives about the Company, its business and its governance practices. In recent years, the Company has established a more robust stockholder engagement program under the oversight of the Nominating and Governance Committee. As part of this program, to facilitate information flow to and from investors, the Board has designated

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leaders from its management team to serve as primary points of contact for the Company in communications with stockholders: Gerald Gradwell and Ashish Kohli from Investor Relations (collectively, the “IR contacts”), and Collin Smyser, Vice President, Assistant Corporate Secretary. The IR contacts are the main points of contact for the analyst community and keep senior management and the Board informed about investor views on the stock market, financial performance and strategic issues. Mr. Smyser engages with stockholders on a regular basis regarding corporate governance, executive compensation, leadership and sustainability matters, and keeps senior management and the Board informed about investor views on those matters. The IR contacts and Mr. Smyser also help facilitate opportunities for stockholders to speak directly with the Chief Executive Officer, senior management and from time to time, other members of the Board as appropriate. Contact information for the investor and stockholder relations teams can be found at http://investor.walgreensbootsalliance.com/corporate-governance.cfm.

In addition, all interested parties may communicate with the Chairman or the directors by email to wbaboard@wba.com or by regular mail directed to Walgreens Boots Alliance, Inc., Attention: Corporate Secretary, 108 Wilmot Road, Deerfield, Illinois 60015. The Corporate Secretary or her designee will collect and organize all such communications, and will forward all relevant communications to the appropriate member or members of the Board, who will determine how such communications should be addressed.

Board Leadership Structure

As stated in the Company’s Corporate Governance Guidelines, the Board believes that its leadership structure is part of the Company’s overall governance process and is a matter to be considered based upon circumstances. The Company’s By-laws provide that the Chairman of the Board may, but need not be, the Company’s Chief Executive Officer. The Board believes it is important to retain its flexibility to allocate the responsibilities of the offices of the Chairman of the Board and Chief Executive Officer in any way that is in the best interests of the Company at a given point in time based upon then-prevailing circumstances. The Board believes that the decision as to who should serve in those roles, and whether the offices should be combined or separate, should be assessed periodically by the Board, and that the Board should not be constrained by a rigid policy mandate when making these determinations.

Currently, the positions of Chief Executive Officer and Chairman of the Board are held by separate persons, with Stefano Pessina serving as Chief Executive Officer and James A. Skinner serving as Executive Chairman. Because Mr. Skinner, an independent director during fiscal 2014, was appointed in January 2015 to serve in an executive capacity, Mr. Foote was appointed to serve as Lead Independent Director in January 2015. The Company believes this structure is optimal at this time because it allows Mr. Pessina to focus on leading the Company’s business and operations. At the same time, Mr. Skinner can focus on leadership of the Board, including calling and presiding over its meetings and preparing meeting agendas in collaboration with Messrs. Pessina and Foote, while working collaboratively with senior management. Similarly, Mr. Foote can lead executive sessions of the independent directors, serve as a liaison and supplemental channel of communication between independent directors and management, and serve as a sounding board and advisor to Messrs. Pessina and Skinner.

Board Oversight of Risk Management

The Company faces a broad array of risks, including market, operational, strategic, legal, regulatory, reputational and financial risks. Management of the Company is responsible for establishing and maintaining systems to manage these risks. The Board exercises oversight over the Company’s strategic, operational and financial matters, including the elements and dimensions of major risks facing the Company. The Board administers its risk oversight function as a whole and through its committees, and uses the processes described below to help assess and monitor the risks the Company faces.

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Throughout the year, the Board and its committees provide oversight and guidance to management regarding the Company’s strategy, operating plans and operating performance. Through these discussions, management identifies current and emerging risks for consideration by the Board and/or its committees.

The Company utilizes a global Enterprise Risk Management (“ERM”) process under the direction of the executive operating committee of its Retail Pharmacy USA division and the business operating committees of its Retail Pharmacy International and Pharmaceutical Wholesale divisions. This global ERM approach helps the Board and its committees receive relevant information about risks and understand the Company’s risk management process, the participants in the process, and key information gathered through the process. The purpose of the ERM process is to identify risks that could affect the Company and the achievement of its objectives, to understand, assess and prioritize those risks, and to facilitate the implementation of risk mitigation strategies and processes across the Company.

In accordance with its charter, the Audit Committee reviews the Company’s policies and processes with respect to enterprise risk assessment and risk management. On a regular basis, the Audit Committee reviews and discusses the key risks identified in the ERM process with management, their potential impact on the Company and its risk mitigation strategies. The other standing committees of the Board oversee management of risks relating to their respective areas of responsibility. For example, the Compensation Committee reviews risks associated with the design and implementation of the Company’s compensation plans and arrangements (see “Executive Compensation—Compensation Discussion and Analysis—Relationship Between Compensation Plans and Risk”), the Finance Committee oversees key aspects of the Company’s financial risk management activities and the Nominating and Governance Committee reviews risks related to the Company’s governance structures and processes.

Director Compensation

This section describes the compensation provided to non-employee members of the Board.

Overview. Non-employee director compensation is reviewed annually by the Nominating and Governance Committee with the assistance of Mercer. Mercer provides information to the Nominating and Governance Committee regarding market compensation, practices and trends, assists in the review and evaluation of such information, and advises the Nominating and Governance Committee on compensation decisions. The Nominating and Governance Committee’s review compares the Company’s director compensation to both retail peer companies and a sample of comparably sized companies in other industries, including the healthcare industry, and seeks to provide director compensation that is competitive with director compensation for these groups. The Nominating and Governance Committee also seeks to provide an appropriate mix of equity-based and cash compensation, so as to link director compensation to the interests of the Company’s stockholders. Any changes to director compensation are recommended by the Nominating and Governance Committee for approval by the full Board.

Fiscal 2015 Director Compensation. During fiscal 2015, the compensation structure for non-employee directors consisted of the following elements, subject to the deferral opportunities described below under “Omnibus Incentive Plan”:

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In addition, in connection with the appointment of Mr. Foote as Lead Independent Director, the Nominating and Governance Committee approved an additional $40,000 annual retainer for the Lead Independent Director, to be paid quarterly in cash.

Directors serving for a portion of the fiscal year receive prorated amounts for all elements of compensation. Mr. Pessina, who served as Executive Chairman of Alliance Boots until shortly after the completion of the Second Step Transaction, elected not to receive non-employee director compensation for his service on the Board. Company executives who serve on the Board, including Mr. Pessina subsequent to the closing of the Second Step Transaction and Mr. Skinner subsequent to his election as Executive Chairman in January 2015, do not receive additional compensation for serving as a director of the Company. (Likewise, Company executives serving on the board of Alliance Boots did not, and Company executives serving on the board of AmerisourceBergen Corporation do not, receive non-employee director compensation for their service as directors of those companies).

All directors are also reimbursed for expenses incurred in connection with meetings of the Board and its committees. On a very limited basis, the Company may determine that it is appropriate for non-management directors to be accompanied by their spouses in connection with these meetings and/or at other events related to their service on the Board. In these circumstances, the Company also reimburses the spouses’ travel expenses. In addition, in accordance with the Company’s Corporate Governance Guidelines, directors are reimbursed for reasonable expenses related to continuing education programs.

Fiscal 2016 Director Compensation. The Nominating and Governance Committee conducted its annual review of director compensation in July 2015, with the assistance of Mercer. The Nominating and Governance Committee recommended and the Board approved an increase in the annual cash retainer from $85,000 to $95,000, effective as of September 1, 2015; and an increase in the annual grant of Company stock from $175,000 to $190,000, beginning with the November 1, 2015 grant.

Omnibus Incentive Plan. The Omnibus Incentive Plan provides for the annual grant (on a date determined by the Board, currently November 1) of fully vested shares of Company common stock to non-employee directors for service as director during the preceding 12-month period. The grant is calculated based on a dollar value established under the Omnibus Incentive Plan, which periodically may be adjusted by the Nominating and Governance Committee. This dollar value was set at $175,000 for the November 1, 2014 grant and $190,000 for the November 1, 2015 grant.

Under the Omnibus Incentive Plan, the following deferral opportunities are available to directors:

All amounts deferred into the deferred cash compensation account accrue interest at a monthly compounding rate equal to 120% of the applicable federal midterm rate. Prior to July 2015, all deferred stock unit and deferred cash compensation account balances were paid in cash in two annual installments, the first of which occurs within 30 days following termination of service on the Board and the second of which occurs 12 months later. In July 2015, the Omnibus Incentive Plan was amended to provide directors additional election options relating to the timing and form of payment of account balances, subject to certain restrictions.

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Prior to the effective date of the Omnibus Incentive Plan in January 2013, annual grants of common stock to non-employee directors, as well as deferral opportunities with respect to the annual grant and other compensation payable to non-employee directors, were made pursuant to the Nonemployee Director Stock Plan, a predecessor plan.

Share Ownership Guidelines for Directors. The Board adopted director share ownership guidelines in 2008. Under the guidelines, each non-employee director is expected to accumulate at least the lesser of (a) 20,000 shares of Company common stock and (b) the number of shares valued at three times the director’s total annual cash and equity compensation. This goal is expected to be met within five years after becoming a director. Deferred stock units acquired pursuant to the Nonemployee Director Stock Plan or the Omnibus Incentive Plan are considered shares owned for purposes of the director share ownership guidelines. As of the Record Date, each non-employee director had met or, using reasonable assumptions regarding future director compensation and stock appreciation, was progressing towards his or her goals in a manner that would allow him or her to meet either the fixed or variable share objectives within the prescribed time frames.

Director Compensation Table

The following table details the compensation provided to each non-employee director for fiscal 2015. The compensation received by Mr. Skinner while he served as an independent director is reported in the Summary Compensation Table.

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Executive Compensation

Compensation Discussion and Analysis

This Compensation Discussion and Analysis describes the material elements of the Company’s executive compensation practices, programs and processes and explains the Company’s executive compensation decisions made with respect to fiscal 2015. This Compensation Discussion and Analysis focuses on the compensation of the Company’s “Named Executive Officers” for fiscal 2015, who are:

Mr. Wasson served as the Company’s Chief Executive Officer from February 2009 until his retirement on January 9, 2015. Mr. Pessina, who has served as the Company’s Executive Vice Chairman since the closing of the Second Step Transaction on December 31, 2014, also became the Acting Chief Executive Officer of the Company, and Mr. Skinner became Executive Chairman of the Company, upon Mr. Wasson’s retirement. Mr. Pessina was appointed as Chief Executive Officer on July 9, 2015. Mr. McLevish resigned as Executive Vice President and Chief Financial Officer of the Company effective February 20, 2015, and Mr. Fairweather became Executive Vice President and Global Chief Financial Officer of the Company as of that date. Messrs. Theriault and Berkowitz ceased to be employees of the Company effective May 31, 2015 and July 14, 2015, respectively. Messrs. McLevish and Theriault continue to serve the Company in consulting roles. See “—Certain Executive Officer Transitions during Fiscal 2015” and “—Severance, Consulting and Change in Control Arrangements” below for more information.

Several of the Company’s Named Executive Officers were executives of Alliance Boots prior to the closing of the Second Step Transaction on December 31, 2014, and therefore received compensation during a portion of fiscal 2015 pursuant to the compensation plans and policies of Alliance Boots. Accordingly, the discussion below includes references to compensation and benefit levels for the “Legacy Walgreens” and “Legacy Alliance Boots” programs. Legacy Walgreens programs refer to those programs in place at Walgreens prior to December 31, 2014, and pursuant to which certain Named Executive Officers who were executive officers of Walgreens prior to such date were compensated during fiscal 2015. Legacy Alliance Boots programs refer to those programs in place at Alliance Boots prior to December 31, 2014, and pursuant to which certain Named Executive Officers who were officers of Alliance Boots prior to such date were compensated during fiscal 2015.

Prior to the closing of the Second Step Transaction on December 31, 2014, Messrs. Pessina and Fairweather were employed by Alliance Boots and, accordingly, did not participate in the Company’s executive compensation programs until the date each assumed his executive role with the Company

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(December 31, 2014, in the case of Mr. Pessina, and February 20, 2015, in the case of Mr. Fairweather). Amounts earned and paid to each of Messrs. Pessina and Fairweather by Alliance Boots prior to December 31, 2014 were a result of compensation decisions made by the remuneration committee of Alliance Boots prior to closing of the Second Step Transaction and did not reflect compensation programs or decisions of the Company’s Compensation Committee; accordingly, such amounts are not included in this discussion or in the compensation tables that follow. Mr. Gourlay has been seconded to the Company from Alliance Boots since October 2013. As a result, payments made prior to the closing of the Second Step Transaction to Mr. Gourlay by both Alliance Boots and the Company’s predecessor, Walgreen Co., are included herein. For more information regarding Mr. Gourlay’s secondment agreement, see “—Certain Executive Officer Transitions in Fiscal 2015” and “Certain Relationships and Related Transactions—Commercial or Other Transactions Involving Alliance Boots and SAHL” below. For Messrs. Skinner, Wasson, McLevish, Theriault and Berkowitz and Ms. Wilson-Thompson, the compensation and related information presented herein for the period prior to the closing of the Second Step Transaction principally relates to Walgreen Co., the Company’s predecessor.

Executive Summary

Recap of Fiscal 2015 Company Performance

With the closing of the Second Step Transaction in December 2014, the Company became the first global pharmacy-led, health and wellbeing enterprise. The Company brought together two leading companies with iconic brands, complementary geographic footprints, shared values and a heritage of trusted healthcare services through pharmaceutical wholesaling and community pharmacy care, dating back more than 100 years.

The Company has a pay-for-performance philosophy that seeks to link the interests of its executives with those of its stockholders. The Company’s financial and business results for fiscal 2015 included the following:

In addition to the points noted above, the Company’s stock price increased 43.0% from the last business day of fiscal 2014 to the last business day of fiscal 2015.

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While the Company has much work to do and opportunities to pursue, it is pleased with its initial progress and performance:

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The Company currently maintains the following balance of pay practices that it believes enhance its pay-for-performance philosophy and further align its executives’ interests with those of its stockholders:

Overview of Key Compensation Decisions and Results

The Compensation Committee is committed to the Company’s pay-for-performance philosophy. Each year, the Compensation Committee determines the final payouts, if any, for annual and long-term incentive awards granted in prior years and makes annual pay decisions, including those related to executive base salaries and grants of annual and long-term incentive opportunities in the current fiscal year.

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Stockholder Approval of the Company’s Executive Compensation on an Advisory Basis

At its 2015 Annual Meeting of Stockholders, the Company held a vote to approve the compensation of its then-current named executive officers as disclosed in its proxy statement dated April 17, 2015 related to that Annual Meeting. Stockholders expressed overwhelming support for the compensation of the Company’s fiscal 2014 named executive officers, with approximately 96.4% of the votes present in person or represented by proxy at the meeting and entitled to vote on the matter cast to approve this “Say-on-Pay” proposal. The Compensation Committee considered this vote as demonstrating strong support for the Company’s compensation programs and continued to apply the same effective principles and philosophies described herein that have been applied in prior years when making compensation decisions for the remainder of fiscal 2015 and fiscal 2016.

Compensation Decision Process

Philosophy and Objectives

The Compensation Committee is comprised entirely of independent directors and is responsible for establishing, implementing and monitoring the Company’s executive compensation philosophy and objectives. The Compensation Committee’s focus is to provide a competitive compensation package that enables the Company to:

Overall, the Compensation Committee believes that the Company’s executive compensation program is achieving its intended results. The Compensation Committee continues to believe that the

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Company’s executive compensation program is competitive with the pay practices of other companies of comparable size, scope and industry, and has resulted in the attraction and retention of executives who can contribute to the Company’s future success as a global organization. In addition, the Compensation Committee believes the program creates a strong linkage between pay and performance through the use of variable performance-based bonus and long-term incentive awards, such that executives will receive higher compensation in more successful periods for the Company and lower compensation during less successful periods.

Pay Mix

The Company continues to emphasize variable performance-based compensation over fixed or guaranteed pay. Substantially all of the fiscal 2015 compensation paid to Mr. Pessina, in his role as Chief Executive Officer, and Mr. Skinner, in his role as Executive Chairman, is “at risk” in the form of restricted stock units, the value of which is tied to changes in the Company’s stock price. In addition, more than 80% of target total direct compensation (base salary, target bonus plus target long-term incentive award) is generally “at risk” for Named Executive Officers and is based on changes in the Company’s stock price and/or the achievement of short-term and long-term financial objectives by the Company. The majority of the then-serving Named Executive Officers’ total target direct compensation was granted in the form of long-term incentives at the beginning of fiscal 2015. The Compensation Committee believes that the current balance of fixed and variable compensation, as well as short-term and long-term compensation elements, maintains a strong link between the Named Executive Officers’ compensation and the Company’s performance and motivates the Company’s executives to deliver strong business performance and create stockholder value.

Role of the Compensation Committee

The Compensation Committee is responsible for overseeing executive compensation, executive succession, and the retirement and equity-based compensation and benefit programs and practices of the Company. In the exercise of its duties, the Compensation Committee considers all elements of the compensation program in total, as well as individual performance, Company performance, internal equity and market compensation considerations. The Compensation Committee reviews and approves all components of the compensation of the Named Executive Officers, reports its decisions to the Board, and oversees the administration of the compensation programs for each of the Company’s senior executives (i.e., Senior Vice President level and above).

To this end, the Compensation Committee conducts an annual review of executive officer compensation practices and market pay levels, approves the design and evaluates the risk associated with the Company’s executive compensation programs, approves the total annual awards under the Company’s short-term and long-term incentive programs, and reviews and approves offer letters and severance arrangements between the Company and any of the senior executives.

Role of Company Personnel in Executive Compensation Decisions

The Company’s Chief Executive Officer reviews annually the performance and pay level of each senior executive, develops recommendations concerning the compensation of each senior executive and presents those recommendations to the Compensation Committee. The Chief Executive Officer does not make recommendations concerning his own compensation. The Company’s Human Resources management provides information, analysis and other support to the Chief Executive Officer and the Compensation Committee during these processes.

Role of Outside Compensation Consultants

The Compensation Committee engages Mercer as its independent compensation consultant. The Compensation Committee utilizes Mercer to provide information regarding market compensation,

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practices and trends, assist in the review and evaluation of such information, and advise the Compensation Committee on compensation decisions, particularly with respect to the compensation of the Company’s Chief Executive Officer. In addition, Mercer assists the Nominating and Governance Committee in the review and evaluation of non-employee director compensation and practices.

The Company engages Aon Hewitt to serve as the executive compensation consultant to the Company’s Human Resources team and executive leadership. Aon Hewitt provides information on competitive practices and pay levels, and provides research on executive compensation issues as requested by management. Aon Hewitt assists management in formulating recommended approaches, and these are in turn reviewed by Mercer. In addition, from time to time and as part of management’s presentation to the Compensation Committee, Aon Hewitt will provide advice to the Compensation Committee regarding management’s presentation and recommendations. Therefore, the Compensation Committee has reviewed and considered all of the relevant factors regarding the relationship with Aon Hewitt. Based on its review, the Compensation Committee has concluded that the advice it receives from Aon Hewitt is objective and not influenced by Aon Hewitt’s other relationships with the Company or its subsidiaries.

Elements of Compensation

The Company’s compensation program includes the principal elements that support its compensation objectives. The following chart contains a brief description of each element:

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Setting Named Executive Officer Compensation

The Compensation Committee carefully considers current market practices, internal equity issues, historical practices and long-term market trends, and attempts to mitigate the effect of short-term market fluctuations in setting executive compensation levels.

To determine competitive compensation, the Compensation Committee establishes a “peer group,” which is reviewed each year by the Compensation Committee, with the assistance of Mercer and updated as appropriate. In selecting potential peer companies, the Compensation Committee considers revenue size, industry, and the peer groups of the Company’s closest competitors. The Compensation Committee believes that this peer group is representative of the market in which the Company competes for talent and includes companies in both the retail and healthcare industries. During its review of the peer group to be used in making decisions regarding fiscal 2015 pay, the Compensation Committee changed the criteria used to select companies for the peer group (industry and revenue size) to include a focus on companies that have a larger proportion of foreign sales and revenues, so as to account for the changes in the Company due to the closing of the Second Step Transaction.

Specifically, the criteria used to identify peer group companies were:

Based on the new peer group criteria, the Compensation Committee approved the following additions to the peer group used for determining fiscal 2015 compensation decisions: AT&T, Inc.; Verizon Communications, Inc.; Archer-Daniels-Midland Co.; Best Buy Co., Inc.; and McDonald’s Corporation.

The Compensation Committee does not target a specific percentile of the peer group in setting compensation. However, the median market compensation serves as a key reference point with respect to each senior executive’s target compensation, taking into account the individual’s experience, performance contributions and role relative to other senior executives.

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Fiscal 2015 Peer Group

The Compensation Committee reviewed the peer group in July 2015 and made no changes to the peer group to be used for fiscal 2016 compensation decisions.

Elements of Compensation

Fiscal 2015 Compensation Programs

As described above, during fiscal 2015, certain Named Executive Officers received benefits under the Legacy Walgreens programs, and certain other Named Executive Officers received benefits under the Legacy Alliance Boots programs. During fiscal 2015:

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Base Salary

Base salary is a key component of the Named Executive Officers’ compensation, both on its own and because annual and long-term incentive targets and awards are calculated based on base salary in certain respects. Base salaries for the Named Executive Officers are established and adjusted following an annual performance review process that coincides with the Compensation Committee’s annual review of peer group compensation. Base salary may also be adjusted during the year upon promotion or based upon internal equity or external market considerations.

In October 2014, the Compensation Committee completed its annual review of market data and individual performance in connection with its consideration of salary adjustments for fiscal 2015. In light of the Company’s challenging performance in fiscal 2014, combined with its efforts to significantly reduce costs, management recommended, and the Compensation Committee approved, no salary increases for the Company’s senior executives, including the Named Executive Officers who were executives of Walgreens at the time. In January 2015, as a result of the management changes after the closing of the Second Step Transaction, the Compensation Committee reviewed market data for the new senior executives for the combined organization and made no changes to salaries for the Named Executive Officers, except for an increase of 5.9% for Mr. Gourlay. Mr. Gourlay’s salary increase reflected an increase of responsibilities as a result of his new role leading Walgreens. All other legacy Alliance Boots executives retained the same base salary levels as were in place prior to the closing of the Second Step Transaction.

In October 2015, the Compensation Committee completed its most recent review of market data and individual performance in connection with its consideration of salary adjustments for fiscal 2016 and approved base salary increases of 2.5% for those Named Executive Officers who continue to serve as employees of the Company, effective November 1, 2015.

Annual Incentives

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The following table summarizes the key features of these programs:

Walgreens Boots Alliance, Inc. Management Incentive Plan.    The MIP promotes the Company’s pay-for-performance philosophy by providing all Company executives and other management-level corporate employees with direct financial incentives in the form of annual cash awards for achieving Company performance goals.

Company Performance

For purposes of Section 162(m) of the Internal Revenue Code, the Compensation Committee uses a two-step approach to determine the amount of the bonus payment. The first step is to fund the overall bonus pool, which is funded if the Company meets a pre-established performance metric. For fiscal 2015, this performance metric was the level of Adjusted FIFO EBIT under the MIP that equates to the threshold 50% of target payout level. The second step is accomplished when the Compensation Committee exercises “negative discretion” by making adjustments to the formula awarded by the overall pool. Negative discretion is used to reduce the amount funded by the pool to an amount equal to the target bonus adjusted for final Company performance and individual performance as follows:

These measures were chosen by the Compensation Committee because, at the time, they supported the Company’s key short-term business objectives to drive earnings and increase cash flow. These measures are intended to reinforce the Company’s business strategy by measuring how well management has increased net sales, managed costs and deployed capital to maintain strong cash flow, which enables the Company to reinvest through strategic acquisitions and investments and return cash to stockholders.

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If the Company achieved its targeted performance on both financial measures in fiscal 2015, then eligible employees would be entitled to 100% of the bonus target, subject to adjustments as described herein. For the Named Executive Officers in fiscal 2015, the target bonuses (expressed as a percentage of salary) were:

In October 2014, the Compensation Committee approved an Adjusted FIFO EBIT goal of $5.751 billion and an Adjusted Free Cash Flow goal of $3.038 billion. These goals were approved with the assumption that the Second Step Transaction would close in March 2015, and that there would be a three-month lag in the reporting of Alliance Boots’ financial results. At that time, the Compensation Committee agreed that, should there be a change to either the date of closing or to the lag in financial reporting, then the goals would be adjusted to reflect such change(s). The Second Step Transaction did close earlier than expected in December 2014, and the three-month lag was eliminated as of the Company’s second quarter of fiscal 2015.

Given these changes to the initial assumptions, and given the significant transition of the Company during fiscal 2015, the Compensation Committee made the following decisions in July 2015 for each of the following groups:

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For purposes of the Free Cash Flow metric, the Compensation Committee agreed to use Walgreen Co. Free Cash Flow for all purposes under the MIP.

In October 2015, after applying the decisions described above, the Compensation Committee approved the adjusted targets and determined the actual performance against the Adjusted FIFO EBIT and Adjusted Free Cash Flow adjusted goals for each of the groups described above, as noted in the table below. As part of its determination, the Compensation Committee further used its downward discretion to reduce the actual Adjusted Free Cash Flow results for fiscal 2015 by $376 million. This negative adjustment was intended to account for the Company’s decision not to make certain estimated capital expenditures during fiscal 2015 (which had the effect of increasing Adjusted Free Cash Flow). With this negative adjustment, the payouts resulting from the Company’s performance were as follows:

As noted above, Mr. Berkowitz was eligible for a bonus based on the synergy targets approved by the Compensation Committee in October 2014 and, then in January 1, 2015, became eligible for a bonus under the WBA Legacy Walgreens criteria described above. Mr. Berkowitz’s total bonus payout as a percentage of salary was 137%, and this included a weighted payout percentage of 51% for the first four months of the fiscal year based on the level of achievement of WBAD synergy targets, plus a weighted payout percentage of 86% for the period January 1, 2015 through his separation date based on the Company’s corporate-wide performance, as described above. The WBAD synergy targets were intended by the Compensation Committee to be challenging, yet achievable with strong management performance.

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Individual Performance

In order to improve the Company’s ability to link pay and performance for the Named Executive Officers, the Compensation Committee authorized the Chief Executive Officer to recommend adjustments to bonus payments up or down by a maximum of 120% of the adjusted formula-driven MIP payout levels (subject to an aggregate maximum of 200%) or to a minimum of 0% of target. These recommendations were subject to the Compensation Committee’s approval. The Compensation Committee has the authority to make such a discretionary adjustment for the Chief Executive Officer.

At the end of fiscal 2015, Mr. Pessina, the Company’s Chief Executive Officer, conducted an evaluation of the contribution of each member of his senior executive team in the areas of strategy, leadership and operating performance. Based on his assessment of each executive’s contribution, Mr. Pessina recommended, and the Compensation Committee approved, a 10% upward adjustment for Messrs. Fairweather and Gourlay and a 5% upward adjustment for Ms. Wilson-Thompson, respectively, relative to the adjusted formula-driven MIP payout levels. These decisions were based on each executive’s extraordinary leadership contributions during fiscal 2015, a year of significant transition for the Company.

As part of their respective retirement or severance agreements with the Company, Messrs. Wasson, Theriault, and Berkowitz received pro-rated bonuses for fiscal 2015 without any adjustments for individual performance. See “—Severance, Consulting and Change in Control Arrangements” below.

As noted above, neither Mr. Pessina nor Mr. Skinner participated in the Company’s bonus program in fiscal 2015, and therefore did not receive a bonus for fiscal 2015. Furthermore, as a result of his resignation in February 2015, Mr. McLevish did not receive a bonus for fiscal 2015.

Based on the Company’s performance and individual performance adjustments described above, fiscal 2015 bonuses under the MIP for those Named Executive Officers who received bonuses under the MIP were as follows:

For fiscal 2016, the Compensation Committee has determined that payouts under the MIP will be tied solely to the Company’s Adjusted Operating Income, which is non-GAAP operating income after certain adjustments, achieved during fiscal 2016. The Compensation Committee chose this metric because it believes it reflects overall profitability and the ability of the Company’s management to drive stockholder value and provides insight when analyzing the core operating performance of the Company’s business from period to period and trends in the Company’s historical operating results. The metric is calibrated so that results will range between 50% and 200% of the target award opportunity established for each participant. The threshold (50%) and maximum (200%) goals are set in relation to the Board-approved budget for the Company for fiscal 2016, and the failure to achieve threshold

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performance goals results in forfeiture of the entire opportunity. The Compensation Committee retains the right to adjust the results of individual measures to exclude charges or items from the measurement of performance relating to restructurings, discontinued operations, purchase accounting items and other unusual or non-recurring charges or events. The target bonus for Executive Vice Presidents of the Company for fiscal 2016 is 90% or 100% of salary, depending on the specific role, and the maximum is 200% of target. Mr. Pessina, the Company’s Chief Executive Officer, is not expected to receive a bonus in fiscal 2016.

Alliance Boots Senior Management Annual Incentive Plan.    In addition to the five months (April 1, 2015 through August 31, 2015) for which he was eligible for the MIP, Mr. Fairweather was paid a bonus for the Alliance Boots fiscal year ended March 31, 2015 based on the Legacy AB MIP in place for such fiscal year. The target bonus opportunity for Mr. Fairweather under the Legacy AB MIP was 75% of his annual base salary, and the maximum bonus opportunity was 200% of target, or 150% of his annual base salary. The Legacy AB MIP provided a bonus consisting of two performance measures:

For the Business Performance element, threshold company performance was set at 92% of budgeted group Trading Profit of the legacy Alliance Boots business, target payout was set at 100% of budgeted group Trading Profit of the legacy Alliance Boots business, and maximum payout was set at 102.5% or more of budgeted group Trading Profit of the legacy Alliance Boots business, as set forth in the chart below. Trading Profit is defined as profit from operations before amortization of customer relationships and brands, exceptional items and share of post-tax earnings of associates and joint ventures and was accounted for under IFRS.

The budgeted group Trading Profit goal for the legacy Alliance Boots business for the fiscal year ended March 31, 2015, as adjusted by the Compensation Committee to reflect the exclusion of certain unbudgeted items, was £1,197.4 million and was achieved at £1,165 million, which equated to an achievement of 97.3% of budget. Using the formula above, the resulting bonus for the Business Performance bonus element for Mr. Fairweather was 32.9% of his base salary for that fiscal year. Mr. Fairweather’s Individual Performance element was achieved at the maximum level (60% of base salary) based on his service provided to Alliance Boots prior to the closing of the Second Step Transaction. The following chart summarizes the actual payments that were approved by the Compensation Committee:

The above amounts were determined and paid in British Pounds Sterling and converted to U.S. dollars at an exchange rate of approximately £1=$1.5535 (the average exchange rate during fiscal 2015).

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Long-Term Incentives

As noted above, Messrs. Wasson, McLevish, Theriault and Berkowitz and Ms. Wilson-Thompson participated in the Legacy Walgreens long-term incentive program in fiscal 2015. Messrs. Fairweather and Gourlay participated in the Legacy Alliance Boots program. The following table summarizes the key features of these programs, which are described in more detail below.

Walgreens Boots Alliance Long-Term Incentives.    During fiscal 2015, the Company continued to use three long-term incentive (“LTI”) vehicles: stock options, restricted stock units (“RSUs”) and performance shares, targeting a mix of 40% stock options, 25% RSUs and 35% performance shares.

The fiscal 2015 grants approved and implemented by the Compensation Committee and granted on November 1, 2014 are shown in the Grants of Plan-Based Awards table below.

Consistent with prior years, the number of shares subject to each award type was based on the average per-share closing price of Company common stock over the last 30 trading days of the fourth quarter of fiscal 2014 to diminish the impact of fluctuations, positive or negative, in stock price on grant sizes. Because the dollar values shown in the Stock Awards and Option Awards columns of the Summary Compensation Table below reflect the November 1 grant date fair value of such equity awards (determined in accordance with the applicable accounting standards using the stock price and other information as of the date of grant), fluctuations, positive or negative, in the Company’s stock price as of November 1 relative to the average per-share closing price over the last 30 trading days of the fiscal year can increase or decrease the grant date values of such awards presented in the Summary Compensation Table. Stock options are granted at an option exercise price not less than the fair market value of the Company’s common stock on the date of the grant. The grant date fair value of the awards is shown in the Summary Compensation Table, and the amounts of equity awards granted to each of the Named Executive Officers are listed in the Grants of Plan-Based Awards table. Outstanding equity awards are shown in the Outstanding Equity Awards at 2015 Fiscal Year End table.

As part of the Company’s effort to further increase the role of individual performance in compensation decisions, it applied an individual performance adjustment factor that may result in an incremental increase or decrease in the amount of stock options and RSUs granted to each eligible participant based on the individual’s performance for the prior year. At the end of fiscal 2014,

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Mr. Wasson conducted an evaluation of the contribution of each member of his senior executive team in the areas of strategy, leadership and operating performance as it relates to the long-term goals of the Company. Based on his assessment of each executive’s contribution, Mr. Wasson recommended to the Compensation Committee individual increases for Mr. Berkowitz and Ms. Wilson-Thompson of 5% over the target number of stock options and RSUs granted in fiscal 2015. These adjustments were made to recognize the future potential of the executives. Mr. Wasson recommended no adjustment to the target number of stock options and RSUs granted in fiscal 2015 for Mr. Theriault. No adjustments were made for Mr. McLevish, who had recently joined the Company. The full Board reviewed the performance of Mr. Wasson using the same review process as noted above, applying those considerations appropriate for the Chief Executive Officer role. As a result of that review, the Compensation Committee approved an increase of 5% over the target number of stock options and RSUs granted in fiscal 2015. The number of shares awarded is detailed in the Grants of Plan-Based Awards table below.

Each of the long-term incentive components currently provided as part of the program are granted annually under the Omnibus Incentive Plan and are described in more detail below.

Messrs. Pessina, Fairweather, Gourlay and Skinner did not receive long-term incentive awards for fiscal 2015 as they were not employees of Walgreen Co. on September 1, 2014, the date on which eligibility for awards under the Omnibus Incentive Plan was determined.

Executive Stock Options.    Stock options are granted to the Named Executive Officers at the discretion of the Compensation Committee in order to enhance the link between stockholder value creation and executive pay. Stock options provide value to executives only if the Company’s share price increases, and provide no realizable value to executives if the Company’s share price does not increase.

Unless otherwise approved by the Compensation Committee for new hire awards or other special circumstances, stock options become exercisable on the third anniversary of the date of grant and expire ten years from the date of grant with special rules covering the various types of termination of employment that might occur during the vesting period or thereafter (as further detailed in the “Potential Payments upon Termination or Change in Control” section below).

Restricted Stock Units.    The value of RSUs rises and falls with the Company’s share price, consistent with stockholder returns. RSUs are designed to complement stock options, and therefore the timing and structure of RSU grants are aligned with option grants in various ways. RSUs were granted to the Named Executive Officers at the discretion of the Compensation Committee. Annual RSU grants vest on the third anniversary of the date of grant, assuming continued employment through that date and upon satisfaction of the performance threshold described below, with special rules covering the various types of termination of employment that might occur during the vesting period (as further detailed in the “Potential Payments upon Termination or Change in Control” section below). Dividend equivalents with respect to RSUs are credited as additional RSUs, subject to the same vesting conditions as the underlying RSUs. In addition, for fiscal 2015, the Compensation Committee adopted a one-year performance threshold that is required to be met prior to the vesting of the RSUs. This performance threshold is based on the level Adjusted FIFO EBIT that equates to the threshold 50% of target payout level (as calculated under the terms of the Management Incentive Plan). If the performance threshold is not met in the fiscal year in which the RSUs are granted, the awards are forfeited (except in the case of retirement, disability or death prior to the end of the fiscal year). The Compensation Committee eliminated RSUs for fiscal 2016 in favor of a mix of LTI vehicles that includes awards that it believes are more significantly performance-based.

Performance Shares.    Executives receive grants of performance shares, which are measured and realized over a performance period covering three fiscal years. Each “performance share” represents the right to receive, if and to the extent designated performance goals within the three fiscal year

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performance period are satisfied, a share of Company common stock following completion of the performance period. Performance periods overlap, with a new three-year performance cycle beginning each fiscal year. At the end of each performance period, performance shares are distributed based upon the level of achievement of the financial performance target set for that cycle. If the Company fails to meet threshold performance in the three-year period, no performance shares will be earned and no payout of performance shares will be made with respect to that cycle. In July 2014, the Compensation Committee revised the terms of its performance share awards such that for all performance share awards granted after fiscal 2014, in the event of an involuntary separation without cause within one year after a change in control (as such terms are defined in the Company’s Executive Severance and Change in Control Plan), only a pro rata portion of the target level of performance shares for each incomplete period will vest. Because performance shares generally vest upon achievement of performance goals over a three-year period, the Compensation Committee determined that pro rata vesting is appropriate in the event of a Change in Control prior to the end of the performance period.

For the fiscal 2015-2017 performance period, the Compensation Committee adopted two metrics: cumulative Adjusted FIFO EBIT and cumulative Adjusted FIFO ROIC. Adjusted FIFO EBIT is aligned with the Company’s business goals, is considered by management when analyzing the core operating performance of the Company’s business and is readily understandable by participants. Adjusted FIFO ROIC also recognizes the Company’s long-term business objectives and over time correlates with stockholder value creation in a capital-intensive business. Expressed as a percentage, FIFO Adjusted ROIC is calculated by dividing (A) the cumulative adjusted FIFO operating income, increased by the implied interest expense of lease payments and reduced by taxes at the applicable rate, by (B) the weighted average of the sum of stockholders’ equity, debt, last in first out (LIFO) inventory reserve, deferred income taxes and capitalized leases over the applicable performance period.

The following table illustrates the ranges of potential formulaic payouts based on threshold, target and maximum performance levels, as well as the weighting for each metric for the fiscal 2015-2017 performance share cycle:

The Company does not publicly disclose its expectations of how the Company will perform on a prospective basis in future periods or specific long-term incentive plan targets applicable under its compensation programs, due to potential competitive harm. The target performance goals for Cumulative Adjusted FIFO EBIT and Cumulative Adjusted FIFO ROIC for each three-year performance cycle reflect the Company’s long-range plan for that cycle. The performance goals are designed to be

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appropriately challenging, and there is a risk that payments will not be made at all or will be made at less than 100% of the target amount. The degree of difficulty, therefore, in achieving the target internal measures is designed to be reasonably challenging.

Fiscal 2013-2015 Performance Shares.    At the beginning of fiscal 2013, performance shares were granted to the Company’s executive officers. The awards had a performance period of September 1, 2012 through August 31, 2015 and were contingent on the Company achieving its three-year Cumulative Adjusted FIFO EBIT and Cumulative Adjusted FIFO ROIC goals. The goals were set aggressively and designed to be challenging for the following three-year period.

The following chart identifies the financial performance measure, the performance goals and corresponding payouts as a percentage of the target performance share opportunity for the fiscal 2013-2015 performance share cycle, and the corresponding payouts as a percent of the target performance share opportunity:

In October 2015, the Compensation Committee determined that the three-year Cumulative Adjusted FIFO EBIT and Cumulative Adjusted FIFO ROIC goals for fiscal 2013-2015 were achieved at $16.212 billion and 8.6%, respectively. As a result, the Compensation Committee determined that the fiscal 2013-2015 performance shares had been earned at 70% of target and approved the resulting performance share payouts to the Named Executive Officers who had received such performance shares.

New Hire Grants to Mr. McLevish.    In September 2014, the Compensation Committee approved a grant of LTI awards to Mr. McLevish in connection with his hiring and appointment as an executive officer in August 2014. Mr. McLevish received 1,852 performance shares, 1,085 RSUs and 6,489 stock options. In each case, the number of awards granted was based on the methodology approved by the Compensation Committee for grants to new hires during fiscal year 2014, including pro-ration to reflect the portion of fiscal year for which he actually served. The other terms and conditions of these awards were consistent with the terms of the LTI awards granted to other executives in fiscal year 2014. All of these awards were forfeited upon Mr. McLevish’s resignation as an executive officer.

Special Transition Awards.    In recognition of the anticipated closing of the Second Step Transaction and related risks and opportunities, the Compensation Committee approved special one-time transition awards for certain key leaders, including certain of the Named Executive Officers. The objective of these transition awards was to create organizational and functional stability during a period of significant change and to provide recognition for certain executives who would be functioning in a combination of roles due to the transition of the Company. The awards were granted on September 15, 2014 for Messrs. Theriault and Berkowitz and Ms. Wilson-Thompson and on October 7, 2014 for

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Mr. McLevish, each in the form of RSUs. The vesting of these awards is contingent upon the successful closing of the Second Step Transaction and continued employment through the vesting dates, subject to certain exceptions, including full vesting upon termination of employment without cause following the closing of the Second Step Transaction. The first vesting date was the date of the closing of the Second Step Transaction on December 31, 2014, at which time 40% of each transition award vested. The second vesting date is 12 months following the date of the closing of the merger, at which time the remaining 60% will vest. The portion of the awards vesting as of the second vesting date is also subject to the attainment of the same fiscal 2015 performance criteria applicable to the annual RSU award described above, which was certified by the Compensation Committee as having been achieved in October 2015. Messrs. Pessina, Skinner, Gourlay and Fairweather (who were not executives of the Company prior to the closing of the Second Step Transaction) and Mr. Wasson did not receive awards. The awards granted to Messrs. McLevish, Theriault and Berkowitz and Ms. Wilson-Thompson were as follows:

As of the closing of the Second Step Transaction, the first 40% of these awards became vested and settled in shares. Mr. McLevish forfeited the remaining 60% of his award on his date of termination of employment. Messrs. Theriault and Berkowitz became vested in the remaining 60% of their awards upon termination of employment (see “—Severance, Consulting and Change in Control Agreements” below).

RSU Grants to Messrs. Pessina and Skinner.    On January 14, 2015, the Compensation Committee approved the grant of awards of RSUs to Messrs. Skinner and Pessina, which awards have a grant date of January 15, 2015. Mr. Skinner was granted a number of RSUs equal to $5 million divided by the closing price per share of the Company’s common stock on the grant date, and Mr. Pessina was granted a number of RSUs equal to $7 million divided by the closing price per share of the Company’s common stock on the grant date. The awards were granted to Mr. Skinner in connection with his service as Executive Chairman of the Company and Mr. Pessina in connection with his service as Acting Chief Executive Officer of the Company. Each of the awards will vest on the third anniversary of the grant date, subject to the satisfaction of certain Company performance criteria during the last six months of fiscal 2015, which was certified by the Compensation Committee as having been achieved in October 2015, and subject to forfeiture or accelerated vesting in certain circumstances, including accelerated vesting if Mr. Skinner or Mr. Pessina, respectively, ceases to serve on the Board in certain circumstances.

Fiscal 2016 Long-Term Incentives.    During its annual review of market compensation in October 2015, the Compensation Committee adopted a new approach for LTI awards granted to the Named Executive Officers currently serving as employees of the Company in fiscal 2016. The new approach provides for awards based on a fixed dollar amount of target economic value rather than a percent of salary target. This approach provides for the same value of awards for executives regardless of salary. The Compensation Committee based the value for the executives on Global Level and market data that was closest to the tier identified for each Global Level.

The total target dollar value for the award is divided between stock options (50%) and performance shares (50%) to align the mix of LTI vehicles more heavily to performance-based awards. To determine the number of stock options to be granted, the dollar value is divided by the Black-Scholes value of the 30 day average share price of Company common stock over the last 30 trading days of fiscal 2015. To determine the number of target performance shares to be awarded, the dollar value is

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divided by the 30-day average share price of Company common stock over the last 30 trading days of fiscal 2015. All performance shares vest at the end of the three year performance cycle. Stock options for Ms. Wilson-Thompson become exercisable on the third anniversary of the date of grant. Stock options for Messrs. Fairweather and Gourlay become exercisable in three installments on the first, second and third anniversary of the date of grant.

As discussed above under “—Annual Incentives,” Mr. Pessina conducted an evaluation of the contribution of each member of his senior executive team. With respect to long-tern incentives, Mr. Pessina recommended, and the Compensation Committee approved, a 10% upward adjustment for Messrs. Gourlay and Fairweather and a 5% upward adjustment for Ms. Wilson-Thompson, respectively, to the total target dollar value for the stock options portion of the award. For fiscal 2016, the dollar values and number of shares that were awarded to the Named Executive Officers currently serving as employees of the Company are as follows:

Legacy Alliance Boots Long-Term Incentives.    The Legacy Alliance Boots Long-Term Incentive Plan (“Legacy AB LTIP”) was introduced for senior managers in the Alliance Boots group effective August 2012. The LTIP award was designed to align senior managers’ interest with the goal of creating long-term stockholder value and was comprised of three separate parts as follows:

1. A Group Target Part, which was a cash award and had a maximum value based on the job grade of the participant. This portion of the award was subject to a performance condition based on the budgeted Trading Profit performance of the Alliance Boots group. The performance measurement periods were the respective years ending in March 2013, March 2014 and March 2015. At the end of each performance period, the actual performance against the Trading Profit target was determined. Immediately prior to the closing of Second Step Transaction, the award in respect of the performance periods through March 2014 vested. Two thirds of the total vested amount was paid in January 2015, and the remainder will be paid one year following the closing of Second Step Transaction (subject to continued employment of the participant).

The performance period ending March 2015 was certified after the fiscal year ending March 31, 2015. Two thirds of the vested award was approved by the Compensation Committee and paid in April 2015, and the remainder will be paid one year following the closing of Second Step Transaction (subject to continued employment of the participant).

2. A Synergy Target Part, which was a cash award subject to a performance condition based on a synergy target. The performance periods for this part were the Company’s fiscal years ending in August 2013, August 2014 and August 2015. Immediately prior to the closing of Second Step Transaction, the performance condition was certified for the periods through August 2013, August 2014 and the stub period through December 2014. Two-thirds of the total amount vested was paid in January 2015, and the remainder will be paid one year following the closing of Second Step Transaction (subject to continued employment of the participant). The award covered by the performance period from January 2015 to August 2015 lapsed.

3. A Share Part, which consisted of a fixed number of Walgreen Co. shares (which were purchased in the open market in 2012). These shares (which were converted into shares of Walgreens Boots Alliance, Inc. on December 31, 2014 in connection with the Reorganization) vested and were distributed immediately prior to the closing of the Second Step Transaction.

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Because the Share Part was granted in 2012 and vested prior to the closing of the Second Step Transaction, the resulting distribution of shares was not approved by the Compensation Committee, and these shares are not considered fiscal 2015 compensation paid by the Company for either of Messrs. Fairweather or Gourlay. Because the award for the Group Target Part for the performance periods through March 2014 and for the Synergy Target Part vested prior to the closing of the Second Step Transaction, they were not approved by the Compensation Committee and, for Mr. Fairweather (who was not an employee of the Company when the awards vested), are not considered fiscal 2015 compensation paid by the Company. However, because Mr. Gourlay was seconded to the Company at the time the awards vested, the portion of such awards paid during fiscal 2015 have been included in his fiscal 2015 compensation in the tables below under “—Executive Compensation Tables and Supporting Information.” The total award for Mr. Gourlay in respect of the Synergy Target Part was £518,518 (approximately $805,518), with two-thirds of the award (£345,679 (approximately $537,012)) paid in January 2015 and the remainder (£172,839 (approximately $268,505)) to be paid in January 2016, subject to Mr. Gourlay’s continued employment with the Company through December 31, 2015. The total award for Mr. Gourlay in respect of the Group Target Part Performance Periods through March 2014 was £296,296 (approximately $460,296), with two-thirds of the award (£197,531 (approximately $306,864)) paid in January 2015 and the remainder (£98,765 (approximately $153,431)) to be paid in January 2016, subject to Mr. Gourlay’s continued employment with the Company through December 31, 2015. Amounts are determined and paid in British Pounds Sterling and converted to U.S. dollars at an exchange rate of approximately £1=$1.5535 (the average exchange rate during fiscal 2015).

The payments for the Group Target Part for the period ending March 31, 2015 were approved by the Compensation Committee and paid to the eligible Legacy Alliance Boots executives based on the achievement of the Trading Profit goals for the Alliance Boots group for the period ending March 31, 2015. The awards for these Named Executive Officers were as follows:

Amounts are determined and paid in British Pounds Sterling and converted to U.S. dollars at an exchange rate of approximately £1=$1.5535 (the average exchange rate during fiscal 2015).

Retirement Plans and Programs

The Company offers retirement benefits to its employees through a tax-qualified 401(k) Profit Sharing Retirement Plan (the “401(k) Plan”). The 401(k) Plan is a defined contribution plan designed to accumulate retirement funds for participating employees, including executive officers, via individual and Company contributions. The retirement benefits available for the Company’s executive officers under the tax-qualified 401(k) Plan are the same as those available for other eligible employees.

The Company also has a non-qualified supplemental profit sharing plan, the Executive Deferred Profit Sharing Plan (“Executive Deferred Plan”), in which certain Named Executive Officers began accruing benefits in phantom accounts beginning in the 2011 plan year. The Executive Deferred Plan replaces the contributions the Company is unable to provide under the tax-qualified 401(k) Plan as a result of various tax law limitations that restrict contributions made for highly-compensated

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participants under the 401(k) Plan. The amounts credited to the Executive Deferred Plan are unfunded, unsecured promises to pay a benefit in the future. The executives may elect to have their phantom accounts credited with earnings, gains and losses as though they were invested in any of the same funds as offered under the 401(k) Plan. An executive may elect to receive payment of his or her account under the Executive Deferred Plan in a lump sum or installment payments beginning after termination of employment. The Compensation Committee approved an amendment to this plan, effective January 1, 2012, to add an elective deferral feature to replace the deferred compensation plans historically offered by the Company on an occasional basis. Under the amendment, participants may also defer, on a pre-tax basis, up to (i) 50% of their annual base salary and/or (ii) 85% of their annual bonus. This plan was amended and restated on December 31, 2014 to reflect its assumption by Walgreens Boots Alliance in connection with the Reorganization.

The Company has also provided deferred compensation opportunities in the past through separate non-qualified Deferred Compensation/Capital Accumulation Plans that have been offered to executives and other management-level employees from time to time. The most recent Deferred Compensation/Capital Accumulation Plan opportunity was offered in calendar year 2011. The crediting rate under the 2011 plan was based on the funds offered in the 401(k) Plan. Account balances under the frozen plans last offered in 2001 and 2006 receive an above-market fixed rate of return, and payments are made over a set number of years starting at age 65 or 70, provided the participant attains retirement eligibility (at least age 55 with at least 10 years of service). Participants who terminate employment prior to retirement eligibility receive a lump-sum payment following termination, typically at a reduced interest crediting rate, which varies based on the reason for termination. The Compensation Committee does not anticipate offering such plans in the future. Instead, deferral opportunities are available under the Executive Deferred Plan described above. Contributions, withdrawals, earnings and accumulated balances for all applicable Deferred Compensation/Capital Accumulation Plans are shown in the Nonqualified Deferred Compensation table.

In connection with the Second Step Transaction, the Company assumed certain of Alliance Boots’ defined benefit pension plans. The principal defined benefit pension plan is the Boots Pension Plan, which covers certain employees in the United Kingdom. The Boots Pension Plan is a funded final salary defined benefit plan providing a retirement pension and a dependent’s pension on the death of the participant. The Boots Pension Plan was closed to future accruals effective June 30, 2010 with benefits calculated by reference to pensionable salaries as of that date. The plan is subject to an actuarial funding valuation on a triennial basis. The Company also assumed two smaller defined benefit plans in the United Kingdom, the Boots Supplementary Pension Plan and the Boots Additional Pension Arrangement, both of which were closed to future accruals effective June 30, 2010.

Perquisites

Consistent with the philosophy and culture of the Company, perquisites and personal benefits provided to the Named Executive Officers and other senior executives are limited. They include an annual physical examination, limited reimbursement of health club dues, long-term disability and personal accident insurance, preferred flight status within certain airline programs and limited personal use of Company aircraft. Pursuant to the Company’s guidelines for aircraft usage, the Company permits personal use of its aircraft by its Chief Executive Officer and Executive Chairman and permit their respective spouse or partner to accompany them on such personal trips. The Company also permits their respective spouse or partner to accompany them on business trips. Personal use of the Company aircraft by other executive officers is allowed to the extent approved by the Chief Executive Officer and only in certain circumstances. The Compensation Committee authorized Mr. Wasson, during the time he served as Chief Executive Officer, to use the aircraft without requiring reimbursement for up to 30 flight hours per year for personal travel, and he was required to reimburse the Company in connection with any personal use of the aircraft in excess of that limit. Mr. Wasson did not exceed that limit during

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fiscal 2015. The Compensation Committee has also authorized each of Mr. Pessina and Mr. Skinner, during the time they serve as Chief Executive Officer and Executive Chairman, respectively, to use the aircraft without requiring reimbursement for up to 20 flight hours per year for personal travel, and each is required to reimburse the Company in connection with any personal use of the aircraft in excess of that limit. Mr. Pessina did not use the aircraft for personal travel during fiscal 2015 and Mr. Skinner did not exceed 20 hours of use during fiscal 2015. The Company’s Chief Executive Officer and Executive Chairman, to the extent their use of Company aircraft for personal travel exceeds the number of hours per year allowed by the Compensation Committee without reimbursement, and the Company’s other executive officers, if any, who use Company aircraft for personal travel, are required to reimburse the Company, pursuant to an aircraft time-sharing agreement consistent with FAA regulations, an amount intended to approximate the incremental cost to the Company of such personal travel. None of the Company’s other executive officers used Company aircraft for personal travel during fiscal 2015. In addition, and consistent with the Company’s objective to attract and retain a high-performing executive management team, the Company actively recruits outstanding candidates to fill executive level and other strategic openings and will reimburse a newly hired senior executive for relocation costs.

In accordance with Company policy, executive officers are also eligible for certain relocation and related benefits if they are assigned to work in a country that is not their “home country” (as defined in the applicable Company policy). Mr. Berkowitz entered into an assignment agreement with the Company in 2012 in connection with an international assignment and received certain benefits under the assignment agreement and the Company’s Long-Term Global Assignment Relocation Policy, including cost of living, automobile, relocation, housing and related allowances, spousal language training and dependent children schooling expenses, home leave airfare, tax preparation assistance, and payments related to the loss upon the sale of automobiles.

Certain executive officers who were employed with Alliance Boots prior to the closing of the Second Step Transaction receive a company car (or cash allowance in lieu), payment by the Company of certain costs associated with life, health and other insurance policies (including, in some cases, coverage for spouses and dependent children), long-term disability coverage and a guaranteed death benefit of five times base salary (offset by any benefits provided under pension plans); if any of these executives decline a particular benefit, he or she may receive a cash payment in lieu of that benefit. In addition, Messrs. Fairweather and Gourlay receive a cash payment of 40% of their salary in lieu of participation in the legacy Alliance Boots defined contribution plan. They also receive certain tax equalization benefits and tax assistance (as described below in “—Certain Executive Officer Transitions in Fiscal 2015”).

The Company’s senior executives at the Senior Vice President level and above, including certain of the Named Executive Officers, receive certain continued benefits following their retirement from the Company. These executives are able to continue receiving an annual Company-paid physical exam during retirement, to age 70. Executives who retired prior to October 2014 are entitled to the continuation of preferred flight status within a designated airline’s program. The above benefits are not contractual, but rather are based on current Company policy, which is subject to change or termination at the discretion of the Compensation Committee.

Relationship between Compensation Plans and Risk

Management retained Ernst & Young LLP to conduct a risk review of the Company’s compensation programs at the end of fiscal 2013 to assess whether any of its incentive compensation plans, either individually or in the aggregate, would encourage executives or employees to undertake unnecessary or inappropriate risks that were reasonably likely to have a material adverse impact on the Company. The Compensation Committee reviewed the external risk assessment of the Company’s variable pay plans and considered several factors including the type of plan, the number of participants in each plan, the participants’ level within the organization, the target and maximum payment potential and the

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performance criteria under each plan, and risk mitigating controls in place for each plan. In fiscal 2014, the Compensation Committee reviewed the prior work of Ernst & Young LLP and determined that no material increases in risk were reasonably likely to result from any changes to any of the Company’s material incentive plans since the 2013 review. Because it was determined that there was no material increase in risk as a result of changes to the Company’s incentive plans in fiscal 2015, the Compensation Committee agreed to rely on the review and assessment done in fiscal 2014 with the understanding that a full review will be undertaken in fiscal 2016.

Included in the assessment described above, the Compensation Committee and management evaluated those plans that were identified as having the potential to deliver a material amount of compensation, which included the annual and long-term incentive plans that are described earlier in the Compensation Discussion and Analysis. The Compensation Committee concluded that it is not reasonably likely that risks arising from the Company’s compensation policies and practices would have a material adverse effect on the Company due to a variety of factors. In reaching this conclusion, the Compensation Committee considered the following factors:

Compensation Recovery Policy

The Board has adopted a recoupment or “clawback” policy for cash and equity incentive awards paid to executive officers. The policy provides that in the event that there is a restatement of incorrect financial results, the Compensation Committee will seek reimbursement of the incremental portion of awards paid to executive officers in excess of the awards that would have been paid based on the restated financial results. All forms of incentive compensation are subject to this policy. The Compensation Committee may look back over the three-year period prior to the restatement for the recoupment and may look to current and former executives. In addition, the policy provides the Compensation Committee the discretion to recoup amounts of excess incentive compensation paid to any officer in conjunction with any materially incorrect results (even if not resulting in a restatement), or misconduct on the part of the officer, including fraud or other conduct that would lead to a “for cause” termination. In addition, the Company’s Chief Executive Officer and Chief Financial Officer are subject to any clawbacks that may be required under the Sarbanes-Oxley Act of 2002.

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Certain Executive Officer Transitions in Fiscal 2015

In connection with certain executive officer transitions in fiscal 2015, the Company entered into or assumed certain agreements and arrangements.

Certain executive officers who were employed by Alliance Boots or its subsidiaries prior to the closing of the Second Step Transaction, including Messrs. Fairweather and Gourlay, have employment agreements that continue to be in effect until terminated by mutual agreement. These employment agreements were filed as exhibits to the Company’s Quarterly Report on Form 10-Q filed with the SEC on April 9, 2015. Employment contracts are a competitive market practice in the United Kingdom, which is where Mr. Fairweather resides and where Mr. Gourlay resided at the time he entered into his employment contract.

Benefits provided to Mr. Fairweather pursuant to his agreement are described above in “—Elements of Compensation—Perquisites” and in the Summary Compensation Table below. Mr. Fairweather’s agreement provides for a 12-month notice period prior to termination of employment by either Mr. Fairweather or the Company, subject to certain exceptions set forth in the agreement. On October 28, 2015, the Company entered into a Corporate Travel and Expense Support Letter Agreement with Mr. Fairweather, which was filed as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2015 filed with the SEC on October 28, 2015. This agreement provides certain support for Mr. Fairweather in connection with his business travel in his capacity as an executive officer of the Company. Specifically, it provides that the Company will pay the amount of taxes incurred as a result of certain business travel and accommodation expenses that exceeds the amount of taxes that Mr. Fairweather would have incurred if not for such business travel and accommodation expenses. The Company will also provide at its expense annual tax advice from external tax advisors relating to remuneration from Mr. Fairweather’s employment.

As described below under “Certain Relationships and Related Transactions—Commercial or Other Transactions Involving Alliance Boots and SAHL,” in September 2013, the Company entered into a Secondment Agreement with Alliance Boots Management Services Limited, an affiliate of Alliance Boots (the “Secondment Agreement”), pursuant to which Alliance Boots may second certain of its employees to the Company for particular assignments. Mr. Gourlay has been seconded to Walgreens pursuant to the Secondment Agreement and an assignment letter. As noted above, Mr. Gourlay also has an employment agreement that remains in effect. Benefits provided to Mr. Gourlay pursuant to his assignment letter and employment agreement are described above in “—Elements of Compensation—Perquisites” and in the Summary Compensation Table below. Mr. Gourlay’s employment agreement provides for a 12-month notice period prior to termination of employment by either Mr. Gourlay or the Company, subject to certain exceptions set forth in the agreement, and provides for the payment of redundancy payments in certain circumstances.

On April 7, 2015, following approval by the Compensation Committee, the Company entered into an employment offer letter with Mr. Pessina, effective January 9, 2015. The letter has no specified term and supersedes and extinguishes all previous employment contracts, arrangements, and agreements between Mr. Pessina and Alliance Boots Management Services MC S.A.M. As noted above, Mr. Pessina received an equity award in connection with his service as Acting Chief Executive Officer of the Company; as a result, he currently receives no salary from the Company. Other than this award (and the dividend equivalents provided thereby), Mr. Pessina has chosen not to receive any additional awards under the Omnibus Incentive Plan and has chosen not to participate in the MIP. Mr. Pessina may also receive certain limited benefits in accordance with the Company’s executive compensation program, consistent with his role and status with the Company and will be covered by the Company’s personal accident and travel insurance benefits. The offer letter was filed as an exhibit to the Company’s Quarterly Report on Form 10-Q filed with the SEC on April 9, 2015. Mr. Pessina did not receive additional compensation upon becoming Chief Executive Officer in July 2015.

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The Company does not have any other individual employment agreements with any of the Named Executive Officers.

For a description of the agreements entered into in connection with the retirement of Mr. Wasson, and the terminations of employment of Messrs. McLevish, Theriault and Berkowitz, see “—Severance, Consulting and Change in Control Agreements” and “—Executive Compensation Tables and Supporting Information—Potential Payments Upon Termination or Change in Control” below.

Severance, Consulting and Change in Control Arrangements

In July 2012, the Compensation Committee adopted the Executive Severance and Change in Control Plan, effective January 1, 2013, which was amended and restated on December 31, 2014 to reflect its assumption by Walgreens Boots Alliance in connection with the Reorganization. The Executive Severance and Change in Control Plan provides eligible executives, including some of the Company’s Named Executive Officers, certain severance benefits upon an involuntary termination by the Company at any time (other than for cause or upon death or disability, as those terms are defined in the Executive Severance and Change in Control Plan) and, within one year following a “change in control,” upon an involuntary termination, or upon voluntary termination for “good reason” (as those terms are defined in Executive Severance and Change in Control Plan). The Executive Severance and Change in Control Plan requires both a change in control and a qualifying termination of employment (a double trigger) within one year after the change in control in order to receive severance benefits. Executive officers who were employed with Alliance Boots or its subsidiaries prior to the closing of the Second Step Transaction, including Messrs. Fairweather and Gourlay, will receive severance benefits upon an involuntary termination pursuant to the terms of their employment agreements rather than the terms of the Executive Severance and Change in Control Plan.

Subject to the terms and conditions of the Executive Severance and Change in Control Plan, eligible participants, including certain of the Named Executive Officers, would be entitled to the following, in addition to any accrued but unpaid compensation and vested amounts to which they may be entitled under the Company’s benefit plans; provided they sign and do not revoke a general waiver and release in favor of the Company and its affiliates:

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The resulting payments and benefits would be reduced to the extent necessary to avoid the application of any “golden parachute” excise tax pursuant to Section 4999 of the Internal Revenue Code.

On January 9, 2015, WBA and Walgreens entered into a Retirement and Release Agreement with Mr. Wasson (the “Retirement Agreement”). The Retirement Agreement provides that Mr. Wasson will receive the retirement payments and benefits to which he is entitled under the compensation and benefit plans of the Company and Walgreens, as well as certain other benefits, as described in the Retirement Agreement. The Retirement Agreement includes a release of claims against the Company, Walgreens and their affiliates, a two-year non-solicit covenant with respect to employees and customers and a mutual non-disparagement covenant, and specifies that the non-competition covenants in Mr. Wasson’s restricted stock unit award agreements will continue to apply, as modified by the Retirement Agreement to limit competing businesses to a specified list of companies. The Compensation Committee determined that the benefits provided to Mr. Wasson were reasonable and appropriate based on historic Company practices, market practices, Mr. Wasson’s many years of dedicated service to the Company, and his release of claims and other obligations under the Retirement Agreement.

The Company and Mr. McLevish entered into a consulting services agreement (the “McLevish Consulting Agreement”) dated as of January 26, 2015. In the McLevish Consulting Agreement, Mr. McLevish acknowledged that his resignation was voluntary, and that he was not entitled to any severance or termination benefits in connection with such resignation. The McLevish Consulting Agreement also provided that Mr. McLevish will provide advice and counsel to the Chief Executive Officer of the Company on matters relating to the transition of the finance team of the Company to successive leadership, the post-restructuring integration of the Company, cost savings objectives and business development initiatives during the period from February 20, 2015 to August 20, 2015. The term of the McLevish Consulting Agreement was subject to earlier termination or extension in certain circumstances. The McLevish Consulting Agreement also includes a release of claims against the Company and its affiliates and specifies that the non-competition and other restrictive covenants in Mr. McLevish’s existing restricted stock unit award agreement will continue to apply. In consideration for his services pursuant to the McLevish Consulting Agreement, Mr. McLevish received an award of RSUs under the Omnibus Incentive Plan equal to $2.5 million divided by the closing price per share of the Company’s common stock on the grant date, January 26, 2015. The award vested on August 20, 2015 and was subject to forfeiture in certain circumstances or, in the event the Company terminated the term of the McLevish Consulting Agreement prior to August 20, 2015 for a reason other than Cause (as defined in the Company’s Executive Severance and Change in Control Plan) or certain other reasons specified in the McLevish Consulting Agreement, accelerated pro rata vesting, subject to the terms of the McLevish Consulting Agreement. The Compensation Committee determined that the terms and conditions of the McLevish Consulting Agreement, including the consideration provided to Mr. McLevish thereunder, were reasonable and appropriate based on the nature and scope of the consulting services provided by Mr. McLevish during this critical year of transition in combining Walgreens and Alliance Boots, and in support of his release of claims and other obligations under the McLevish Consulting Agreement.

Following the expiration of the McLevish Consulting Agreement, on November 2, 2015, the Company entered into a second Consulting Services Agreement (the “Second McLevish Consulting Agreement”) with Mr. McLevish. The Second McLevish Consulting Agreement provides that Mr. McLevish will provide advice and counsel to the Chief Executive Officer of the Company on the post-restructuring integration of the Company, cost savings objectives, business development initiatives and such other matters as they deem appropriate. The initial term of the Second McLevish Consulting Agreement ends on February 28, 2016, subject to earlier termination in certain circumstances specified in the Second McLevish Consulting Agreement. If in effect upon the completion of the initial term, the Second McLevish Consulting Agreement will automatically continue on a month-to-month basis, subject to either party’s right to terminate the Second McLevish Consulting Agreement as specified therein. As

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consideration for the consulting services, for the initial term Mr. McLevish will receive a base fee of $1,000,000, in accordance with the timing of payment and other terms and conditions of the Second McLevish Consulting Agreement. Following the initial term, Mr. McLevish will receive a base monthly fee of $166,667 (with a pro-rated amount for any partial month). Mr. McLevish also will be eligible for a performance-based fee for the initial term and each subsequent six-month period of the Second McLevish Consulting Agreement or portion thereof (in each case up to the total base fees received for such measuring period), to be determined in the discretion of the Company’s Chief Executive Officer and Executive Chairman, acting together, and subject to the terms and conditions of the Second McLevish Consulting Agreement. Mr. McLevish also will be reimbursed for reasonable expenses incurred in the performance of such services. The Compensation Committee determined that the terms and conditions of the Second McLevish Consulting Agreement, including the base fees and performance-based fees provided thereunder, are reasonable and appropriate based on the nature and scope of the consulting services provided by Mr. McLevish, particularly in light of the value of services provided to the Company’s Chief Executive Officer in connection with the McLevish Consulting Agreement.

On May 28, 2015, the Company and Mr. Theriault entered into a Separation Agreement and Mr. Theriault executed related General Release and Waiver provisions (collectively, the “Theriault Separation Agreement”). Pursuant to the terms of the Theriault Separation Agreement, Mr. Theriault separated from the Company effective May 31, 2015. Thereafter, Mr. Theriault has continued to provide services to the Company in a consulting role pursuant to the Theriault Consulting Agreement described below. In return for the payments and benefits provided to him under the Theriault Separation Agreement, Mr. Theriault agreed to various provisions, including a general release of claims against the Company and its affiliates, non-disparagement, cooperation and confidentiality covenants, and the continued application of non-competition, non-solicitation and other restrictive covenant obligations under prior agreements signed by Mr. Theriault in connection with restricted stock unit awards. The severance and other benefits provided to Mr. Theriault under the Theriault Separation Agreement are pursuant to the terms and conditions of the Executive Severance and Change in Control Plan described above, as applied to the executive vice president position level. In addition, Mr. Theriault received additional cash payments in recognition of the value of forfeited equity awards that were granted in November 2012, and that would have vested later in calendar year 2015. The Compensation Committee determined that it was reasonable and appropriate during this critical year of transition in combining Walgreens and Alliance Boots to provide these payments and benefits to Mr. Theriault. This determination was also based on Company practices, market practices, and Mr. Theriault’s release of claims and other obligations under the Theriault Separation Agreement.

Also on May 28, 2015, the Company and Mr. Theriault entered into a Consulting Services Agreement (the “Theriault Consulting Agreement”). The Theriault Consulting Agreement provided that Mr. Theriault will be available on a part-time basis to provide advice and counsel to the Chief Executive Officer of the Company and the highest ranking IT officer of the Company (or their designees) on such matters as they deem appropriate, including: providing input for global involvement of architectural/technology choices, including software approach and advising on transformational programs; advising and supporting the cyber-security program; assisting in definition of the global IT organization/cost structure; identifying new business models; leveraging new technologies; and advising/coaching IT leaders as assigned. During the five-month term of the Theriault Consulting Agreement ending on October 31, 2015, Mr. Theriault received a monthly fee of $40,000. The Compensation Committee determined that the terms and conditions of the Theriault Consulting Agreement, including the monthly fees provided thereunder, were reasonable and appropriate based on the nature and scope of the consulting services provided by Mr. Theriault, as well as the transition activities associated with his prior role as Chief Information Officer of the Company.

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Following the expiration of the Theriault Consulting Agreement, on December 2, 2015, the Company entered into a second Consulting Services Agreement (the “Second Theriault Consulting Agreement”) with Mr. Theriault. The Second Theriault Consulting Agreement provides that Mr. Theriault will be available on a part-time basis to provide advice and counsel to the Chief Executive Officer of the Company and the highest ranking IT officer of the Company (or their designees) on such matters as they deem appropriate, including providing input for global involvement of architectural/technology choices, including software approach and advising on transformational programs, advising and supporting the cyber-security program, and advising on merger and acquisition integration and Global Platform Strategy matters. The initial term of the Second Theriault Consulting Agreement ends on October 31, 2016, subject to earlier termination in certain circumstances specified therein. If in effect upon the completion of the initial term, the Second Theriault Consulting Agreement will automatically continue in two-month increments thereafter, subject to either party’s right to terminate the Second Theriault Consulting Agreement as specified therein. As consideration for his services under the Second Theriault Consulting Agreement, Mr. Theriault receives a monthly fee of $40,000. The Compensation Committee determined that the terms and conditions of the Second Theriault Consulting Agreement, including the monthly fees provided thereunder, are reasonable and appropriate based on the nature and scope of the consulting services provided by Mr. Theriault.

On October 14, 2015, the Company and Mr. Berkowitz entered into a Separation Agreement, General Release and Waiver (the “Berkowitz Separation Agreement”). Pursuant to the terms of the Berkowitz Separation Agreement, Mr. Berkowitz separated from his position of Executive Vice President, President Pharma and Global Market Access on July 13, 2015 and from his employment with the Company on July 14, 2015. In return for the payments and benefits provided to him under the Berkowitz Separation Agreement, Mr. Berkowitz agreed to various provisions, including a general release of claims against the Company and its affiliates, non-disparagement, cooperation and confidentiality covenants, and the continued application of non-competition, non-solicitation and other restrictive covenant obligations under prior agreements signed by Mr. Berkowitz in connection with restricted stock unit awards, as modified. The severance and other benefits provided to Mr. Berkowitz under the Berkowitz Separation Agreement are pursuant to the terms and conditions of the Executive Severance and Change in Control Plan described above, as applied to the executive vice president position level. In addition, Mr. Berkowitz received pro-rated cash payments in recognition of the value of certain forfeited equity awards that were granted in November 2012, and that would have vested later in calendar year 2015. The Compensation Committee determined that it was reasonable and appropriate to provide these payments and benefits to Mr. Berkowitz based on Company practices, market practices, and Mr. Berkowitz’s release of claims and other obligations under the Berkowitz Separation Agreement.

For a more complete description of the terms of, and payments and benefits pursuant to, the Retirement Agreement, the Theriault Separation Agreement and the Berkowitz Separation Agreement, please see “—Executive Compensation Tables and Supporting Information—Potential Payments Upon Termination or Change in Control.”

Share Ownership Guidelines for Senior Executives

The Board adopted executive share ownership guidelines in 2008. Under the guidelines, each Named Executive Officer is expected to accumulate the lesser of the fixed and variable number of shares shown below within five years from commencement of senior executive status:

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The following are included in determining the executive’s share ownership for purposes of these guidelines: restricted stock and RSUs, discounted by an assumed tax rate of 35% and only up to 50% of the applicable ownership target; shares held by minor dependents and spouses; and shares owned outright, such as earned performance shares and exercised stock options. The Compensation Committee reviewed executives’ progress towards meeting these goals in October 2015. Using reasonable assumptions regarding executive salary and stock appreciation, the Compensation Committee concluded that all executives are progressing towards their goals in a manner that will allow them to meet either the fixed or variable share objectives within the prescribed time frames. However, should an executive fail to meet the guidelines within the required time frame, the Compensation Committee adopted the following steps for addressing such noncompliance: (1) discussions with the Chief Executive Officer; (2) placing restrictions on selling shares – with any exceptions due to hardship subject to prior approval by the Chief Executive Officer; and (3) imposing mandatory retention of all shares earned and vested (net of taxes), as well as shares resulting from option exercises (net of taxes).

Insider Trading Restrictions and Policy Against Hedging

The Company’s insider trading policy prohibits directors, employees and certain of their family members from purchasing or selling any type of security, whether issued by the Company or another company, while such person is aware of material non-public information relating to the issuer of the security or from providing such material non-public information to any person who may trade while aware of such information. Trades in the Company’s securities by directors and executive officers are prohibited during certain prescribed blackout periods and are required to be pre-cleared by appropriate Company personnel. This policy also prohibits directors and executive officers from engaging in “short sales” with respect to the Company’s securities, entering into “derivative” transactions, including exchange-traded put or call options, with respect to the Company’s securities, or engaging in hedging or monetization transactions, such as collars or forward sale contracts, with respect to the Company’s securities.

Tax-Deductibility of Executive Officer Compensation

Section 162(m) of the Internal Revenue Code generally disallows a tax deduction to public companies for compensation over $1 million paid to each of a company’s chief executive officer and certain other highly compensated executive officers. Qualifying performance-based compensation will not be subject to the deduction limit if certain requirements are met. It is the Compensation Committee’s objective to maximize deductibility under Section 162(m) to the extent consistent with the Compensation Committee’s assessment of the interests of the Company and its stockholders. However, it is not always possible to meet that objective when balanced against the pay-for-performance structure and the practical application of competitive pay practices and, as a result, the Compensation Committee reserves the right to grant compensation that is not deductible under Section 162(m) of the Internal Revenue Code.

The impact of accounting treatment is considered in developing compensation programs generally, including the accounting treatment as it applies to amounts paid or awarded to Named Executive Officers. The Company accounts for its equity incentive awards under FASB ASC Topic 718 and uses the Black-Scholes option pricing formula in determining fair value of stock option grants.

The Company does not provide gross-ups to existing Named Executive Officers for additional taxes under Section 4999 of the Internal Revenue Code (regarding golden parachutes).

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The following Compensation Committee Report shall not be deemed to be incorporated by reference into any filing made by the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934, notwithstanding any general statement contained in any such filing incorporating this Proxy Statement by reference, except to the extent the Company incorporates such Report by specific reference.

Compensation Committee Report

The Compensation Committee reviews the Company’s Compensation Discussion and Analysis on behalf of the Board. The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management, and based on this review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis above be included in this Proxy Statement and in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2015.

Compensation Committee

William C. Foote (Chair until January 15, 2015)

Nancy M. Schlichting (Chair since January 15, 2015)

John A. Lederer

Barry Rosenstein

Leonard D. Schaeffer

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Executive Compensation Tables and Supporting Information

Summary Compensation Table

The following table summarizes the compensation for the 2015 fiscal year for each of the Named Executive Officers.

Mr. Wasson served as the Company’s Chief Executive Officer from February 2009 until his retirement on January 9, 2015. Mr. Pessina, who has served as the Company’s Executive Vice Chairman since the closing of the Second Step Transaction on December 31, 2014, also became the Acting Chief Executive Officer of the Company, and Mr. Skinner became Executive Chairman of the Company, upon Mr. Wasson’s retirement. Mr. Pessina was appointed as Chief Executive Officer on July 9, 2015. Mr. McLevish resigned as Executive Vice President and Chief Financial Officer of the Company effective February 20, 2015, and Mr. Fairweather became Executive Vice President and Global Chief Financial Officer of the Company as of that date. Messrs. Theriault and Berkowitz ceased to be employees of the Company effective May 31, 2015 and July 14, 2015, respectively. Messrs. McLevish and Theriault continue to serve the Company in consulting roles. See “—Compensation Discussion and Analysis—Certain Executive Officer Transitions during Fiscal 2015” and “—Compensation Discussion and Analysis—Severance, Consulting and Change in Control Arrangements” above for more information.

Prior to the closing of the Second Step Transaction on December 31, 2014, Messrs. Pessina and Fairweather were employed by Alliance Boots and, accordingly, did not participate in the Company’s executive compensation programs until the date each assumed his executive role with the Company (December 31, 2014, in the case of Mr. Pessina, and February 20, 2015, in the case of Mr. Fairweather). Amounts earned and paid to each of Messrs. Pessina and Fairweather by Alliance Boots prior to December 31, 2014 were a result of compensation decisions made by the remuneration committee of Alliance Boots prior to closing of the Second Step Transaction and did not reflect compensation programs or decisions of the Company’s Compensation Committee; accordingly, such amounts are not included in the tables below. Mr. Gourlay has been seconded to the Company from Alliance Boots since October 2013. As a result, payments made prior to the closing of the Second Step Transaction to Mr. Gourlay by both Alliance Boots and the Company’s predecessor, Walgreen Co., are included herein. For more information regarding Mr. Gourlay’s secondment agreement, see “—Compensation Discussion and Analysis—Certain Executive Officer Transitions in Fiscal 2015” and “Certain Relationships and Related Transactions—Commercial or Other Transactions Involving Alliance Boots and SAHL” below. For Messrs. Skinner, Wasson, McLevish, Theriault and Berkowitz and Ms. Wilson-Thompson, the information presented herein for the period prior to the closing of the Second Step Transaction principally relates to Walgreen Co.

Information is also presented for the 2014 and 2013 fiscal years if the Named Executive Officer was included in the Company’s Summary Compensation Table for those fiscal years. Information for these years represents compensation paid by Walgreen Co.

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The values shown represent each of the Named Executive Officer’s compensation during the fiscal year, including the grant date fair value of equity awards that were granted during fiscal 2015 and vest on a future date, subject to the terms and conditions of each award. Certain amounts for Messrs. Pessina, Fairweather and Gourlay were paid in British Pounds Sterling and converted to U.S. dollars at an exchange rate of approximately £1=$1.5535 (the average exchange rate during fiscal 2015).