AutoZone 2013 Annual Report Download - page 29

Proxy
PROPOSAL 3 — Advisory Vote on Executive Compensation — “Say-on-Pay”
On December 14, 2011, AutoZone’s stockholders approved, on an advisory basis, AutoZone’s
recommendation that future advisory votes on executive compensation should be held every year. Consequently,
and in accordance with Section 14A of the Securities Exchange Act, we are asking stockholders to approve the
following advisory resolution on the compensation of our Principal Executive Officer, the Principal Financial
Officer and our other three most highly paid executive officers (collectively, the “Named Executive Officers”) at
the Annual Meeting:
“RESOLVED, that the compensation paid to AutoZone’s Named Executive Officers, as disclosed in this
Proxy Statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission,
including the Compensation Discussion and Analysis, the accompanying compensation tables and the related
narrative discussion, is hereby APPROVED.”
This advisory vote, commonly known as a “say-on-pay” proposal, gives our stockholders the opportunity to
endorse or not endorse our executive pay program. The Board of Directors recommends a vote “FOR” this
resolution because it believes that AutoZone’s executive compensation program, described in the Compensation
Discussion and Analysis, is effective in achieving the Company’s goals of rewarding financial and operating
performance and the creation of stockholder value.
Our Board of Directors and Compensation Committee believe that there should be a strong relationship
between pay and corporate performance, and our executive compensation program reflects this belief. While the
overall level and balance of compensation elements in our compensation program are designed to ensure that
AutoZone can retain key executives and, when necessary, attract qualified new executives to the organization,
the emphasis of AutoZone’s compensation program is linking executive compensation to business results and
intrinsic value creation, which is ultimately reflected in increases in stockholder value.
AutoZone sets challenging financial and operating goals, and a significant amount of an executive’s annual
cash compensation is tied to these objectives and therefore “at risk” — payment is earned only if performance
warrants it.
AutoZone’s compensation program is intended to support long-term focus on stockholder value, so it
emphasizes long-term rewards. At target levels, the majority of an executive officer’s total compensation
package each year is the potential value of his or her stock options, which yield value to the executive only if the
stock price appreciates.
Our management stock ownership requirement effectively promotes meaningful and significant stock
ownership by our Named Executive Officers and further aligns their interests with those of our stockholders.
We urge you to read the Compensation Discussion and Analysis, as well as the Summary Compensation
Table and related compensation tables and narrative, appearing on pages 20 through 47, which provide detailed
information on our compensation philosophy, policies and practices and the compensation of our Named
Executive Officers.
Because the vote on this proposal is advisory in nature, it is not binding on AutoZone, the Board of
Directors or the Compensation Committee. The vote on this proposal will, therefore, not affect any
compensation already paid or awarded to any Named Executive Officer and will not overrule any decisions
made by the Board of Directors or the Compensation Committee. Because we highly value the opinions of our
stockholders, however, the Board of Directors and the Compensation Committee will consider the results of this
advisory vote when making future executive compensation decisions.
The Board of Directors recommends that the stockholders vote FOR this proposal.
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