Big Lots 2008 Annual Report Download - page 41

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- 28 -
• leadership and the development of talent; and
• fostering teamwork and other corporate values.
Our CEO, the Committee and the outside directors may each consider different factors and may value the same
factors differently. In selecting individual and corporate performance factors for each EMC member and measuring
an executive’s performance against those factors, our CEO, the Committee and the other outside directors also
consider the performance of our competitors and general economic and market conditions. None of the factors
are assigned a specific weight. Instead, our CEO, the Committee and the other outside directors recognize that
the relative importance of these factors may change as a result of specific business challenges and changing
economic and marketplace conditions. So although the Committee and the other outside directors consider our
CEO’s recommendations, the Committee and the outside directors may not follow, and are not bound by, our CEO’s
recommendations on executive compensation.
Role of Management
As discussed in this CD&A, our CEO plays a significant role in determining executive compensation.
Additionally, our CEO and the Committee consult with management from our human resources, finance and
legal departments regarding the design and administration of our compensation programs, plans and awards for
executives and directors. These members of management provide advice regarding the competitive nature of
existing and proposed compensation programs and the impact of accounting rules, laws and regulations on existing
and proposed compensation programs. Management from our human resources, finance and legal departments
may also act pursuant to delegated authority to fulfill various functions in administering our employee benefit and
compensation plans. Such delegation is permitted by the Committee’s charter and each such plan. Those groups to
whom the Committee has delegated certain responsibilities are each required to periodically report their activities
to the Committee.
Our CEO and some of these members of management attend general meetings of the Committee, and the CEO
participates in the Committee’s discussions regarding the compensation of the other EMC members. However,
these individuals do not participate in executive sessions of the Committee or when executive compensation
determinations are made by the Committee and the other outside directors.
Independent Compensation Consultant
Pursuant to the authority granted to the Committee by its charter, the Committee may retain independent
compensation consultants and subscribe to executive compensation surveys as it deems necessary. The surveys
are also shared with our human resources department. In establishing executive compensation for fiscal 2008,
the Committee subscribed to multiple compensation surveys and engaged Watson Wyatt Worldwide (“Watson
Wyatt”) to provide research, comparative compensation data and executive compensation program design
expertise. Throughout this engagement, Watson Wyatt advised the Committee on all principal aspects of executive
compensation, including the competitiveness of program design and award values. The Committee charged Watson
Wyatt with assisting it to meet the following primary objectives:
• review and validate, or recommend changes to, our executive compensation program;
• obtain better comparative compensation data by developing a new retailer-only peer group of companies
that are similarly situated to us;
• compare the amount and form of executive compensation paid to our executives against the
compensation paid to similarly-situated executives at companies within the peer groups;
• consider minimum share ownership requirements for executives and outside directors; and
• compare the amount and form of compensation paid to our outside directors against the compensation
paid to non-employee directors at companies within the peer groups (which information was shared
with the Nominating/Corporate Governance Committee for use in connection with its evaluation of the
amount and form of compensation paid to our outside directors against the compensation paid to non-
employee directors at companies within the peer groups).