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Notice of Annual Meeting of Shareholders

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Notice of Annual Meeting of Shareholders 999 LakeDrive Issaquah, Washington98027 NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO OURSHAREHOLDERS: TheAnnualMeeting of theShareholders of Costco Wholesale Corporation (the “Company”) will be held by live webcast,onThursday,January 21, 2021, at 2:00 p.m. Pacific time, to: 1. Elect the seven directors nominated by the Board of Directors to hold office until the 2022 Annual Meeting of Shareholders anduntiltheir successors are elected and qualified; 2. Ratifythe selection of KPMG LLP ("KPMG")asthe Company’s independent auditors forfiscal 2021; 3. Approve, on an advisory basis, thecompensation of the Company’snamed executive officers for fiscal 2020 as disclosed in these materials; and 4. Transact such other business as mayproperly come before the meeting or any adjournments thereof. In light of COVID-19and for the safety of our shareholders, employees, and other members of the community, our 2021 Annual Shareholders' Meeting will be held in avirtual format only.Shareholderscan participatefrom any geographic location withInternet connectivity. We believe thisisanimportant steptoenhancing accessibility to our Annual Meeting for all of our shareholders and reducing the carbon footprint of our activities,and is particularly important this year in light of public health andsafety considerations posed by COVID-19. Shareholders may view alive webcast of theAnnualMeeting andsubmit questions digitally during the meeting at www.virtualshareholdermeeting.com/COST2021. Please refertothe "Participating in the Annual Meeting" section of the Proxy Statement formore details. Shareholders can vote their shares before the meeting online at www.proxyvote.com, by calling 1-800-690-6903, by mailing acompleted proxy card or by mobile device by scanning the QRcode on the proxy card or Notice of Internet Availability of Proxy Materials. Shareholders may also vote online during the virtual meeting at www.virtualshareholdermeeting.com/COST2021. Onlyshareholders of record at the close of business on November 12, 2020, are entitled to notice of and to vote at the meeting. All shareholders are requested to be present virtually or by proxy.Any shareholder who later finds thatheorshe can be present at the meeting,orfor any reason desires to do so, may revoke the proxy at any time before it is voted. Important Notice Regardingthe Availability of Proxy Materials forthe 2021 Annual Meeting. We are mailing to many of our shareholders aNotice of Internet Availability of Proxy Materials, rather thanafullpaper set of the materials. The notice contains instructions on how to access our proxy materials on the Internet,as well as instructions on obtaining apaper copy.All shareholders who do not receive such anotice, including shareholders who have previously requested to receive apaper copy of the materials, will receive afullset of paper proxy materials by U.S. mail.This process reduces our costs to print anddistributeproxy materials. Voting by the Internet or telephone is fast and convenient, and your vote is immediately confirmed and tabulated. If you receive apaper copy of the proxy materials, youmay also vote by completing, signing, dating andreturning the accompanying proxy card in the enclosed return envelope furnished for that purpose. By using the Internet or telephone you help the Company reduce postage and proxy tabulation costs. Pleasedonot returnthe enclosed paperballot if you are voting over theInternetorbytelephone. VOTE BY INTERNET VOTE BY TELEPHONE http://www.proxyvote.com (800) 690-6903 via touch-tone 24 hours aday/7 days aweek phone toll-free 24 hours aday/7 days aweek Use the Internet to transmit your voting instructions Use any touch-tone telephone to transmit your voting and for electronic delivery of information up until 11:59 instructions up until 11:59 p.m. Eastern Time on p.m. Eastern Time on January 20, 2021. Have your January 20, 2021. Have your proxy card in hand when proxy card in hand when you access the website, and you call, andthen follow the instructions. follow the instructions to obtain your records and to createanelectronic voting instruction form. Your cooperation is appreciated, because amajority of the common stock must be represented, either in person or by proxy,toconstitute aquorum for the conduct of business. Byorder of the Board of Directors, John Sullivan Senior Vice President,General Counsel and Secretary December 10, 2020 ImportantNotice Regardingthe Availability of Proxy Materials for the MeetingofShareholderstobeHeld on January21, 2021 TheProxy Statementand Annual ReporttoShareholders are available at http://investor.costco.com. TABLE OF CONTENTS Page Solicitation and Revocation of Proxy ................................................. 1 Proposal 1: Election of Directors .................................................... 3 Committees of theBoard .......................................................... 6 Compensation of Directors ......................................................... 8 ShareholderCommunications to theBoard ............................................ 9 Principal Shareholders ............................................................ 10 Equity CompensationPlan Information ............................................... 11 Executive Compensation .......................................................... 11 Compensation Discussion and Analysis ........................................... 11 Report of theCompensation Committee of The Board of Directors ...................... 16 Summary Compensation Table .................................................. 17 Fiscal2020 All Other Compensation .............................................. 18 Fiscal2020 GrantsofPlan-Based Awards ......................................... 18 Outstanding Equity Awards at Fiscal 2020 Year-End ................................. 19 Fiscal2020 Restricted Stock UnitsVested ......................................... 19 Fiscal2020 Non-Qualified Deferred Compensation .................................. 20 PotentialPayments Upon Termination or Change-in-Control ........................... 20 CEO Pay Ratio ............................................................... 23 Certain Relationships andTransactions ............................................... 23 Report of theAudit Committee ...................................................... 24 Independent Public Accountants .................................................... 24 Proposal 2: Ratification of Selection of Independent Public Accountants ..................... 25 Proposal 3: Advisory Vote to Approve Named Executive Officer Compensation ................ 25 Other Matters ................................................................... 26 Shareholder Proposals for the2022 Annual Meeting ..................................... 26 Annual ReporttoShareholders and Form 10-K ......................................... 27 General Information .............................................................. 27 PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD January 21, 2021 SOLICITATION AND REVOCATIONOFPROXY Proxiesinthe form furnished are solicited by theBoardofDirectors of theCompany to be voted at the Annual Meeting of Shareholders to be held on January 21, 2021, or any adjournments (the “Annual Meeting”). The individuals named as proxy are Hamilton E. James and W. Craig Jelinek. ANotice of Internet Availability of Proxy Materials was first sent to shareholders and the accompanying notice of meeting, this Proxy Statement and the form of proxy are first being made availabletoshareholders on or about December 10, 2020. All shares represented by proxies received will be voted in accordance withinstructions contained in the proxies. TheBoard of Directors unanimously recommends avote: 1. FORthe sevennominees for director named in thisProxy Statement; 2. FORthe ratification of the selection of the Company’sindependent auditors; and 3. FORthe approval, on an advisory basis, of thecompensation of the Company’snamed executive officers forfiscal 2020 as disclosed in these materials. In the absence of voting instructions to the contrary,shares represented by validly executed proxies will be votedinaccordance withthe foregoing recommendations. Ashareholder giving aproxy has the power to revoke it any time before it is votedbyproviding written notice to the Secretary of the Company,by deliveringalater-dated proxy,orbyvoting virtually at the Annual Meeting. Only shareholders of record at the close of business on November 12, 2020 (the Record Date) will be entitled to vote at theAnnualMeeting.Atthe close of business on the Record Date, there were 442,955,229 shares of common stock outstanding, which represent all of the voting securities of the Company.Each share of common stock is entitled to one vote.Shareholders do not have cumulative voting rightsinthe election of directors. Amajorityofthe common stock entitled to vote at theAnnualMeeting,present eithervirtually or by proxy,willconstitute aquorum. Shareholders who abstain from voting on any or all proposals will be included in the number of shareholders present at the meeting for purposes of determining the presence of aquorum. Abstentions and broker non-votes will not be included in the total of votes cast and will not affect the outcome of the voteonproposals 1through 3. With respect to proposal 1, the directors receiving the highest number of votes will be elected. The Company’s bylaws provide that at this meeting in an uncontested election for directors a nominee who receives a greater number of “withhold” votes than
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