Big Lots 2011 Annual Report Download - page 58

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Internal Pay Equity
In the process of reviewing each element of executive compensation separately and in the aggregate, the
Committee considered information comparing the relative compensation of our CEO to the other EMC members.
This information was considered to ensure that our executive compensation program is internally equitable, which
we believe promotes executive retention and motivation. The comparison included all elements of compensation.
The relative difference between the compensation of our CEO and the compensation of our other named executive
officers did not change significantly in fiscal 2011, and it has not changed significantly since hiring Mr. Fishman
in 2005. The Committee believes that the disparity between Mr. Fishman’s compensation and the compensation for
the other EMC members is appropriate in light of his responsibilities and remains necessary to retain and motivate
a chief executive with Mr. Fishman’s experience.
Minimum Share Ownership Requirements and Hedging Prohibition
We have Board-adopted minimum share ownership requirements for all outside directors and EMC members.
These requirements are designed to ensure that outside directors’ and executives’ long-term interests are closely
aligned with those of our shareholders. Under the requirements, the outside directors and EMC members must, at
a minimum, own common shares having an aggregate value equal to the following multiple of his or her Board
retainer or salary (as is in effect at the time compliance with the requirements is evaluated), as applicable:
Title Multiple of Retainer or Salary
Director 4x
Chief Executive Officer 4x
Executive Vice President 2x
Senior Vice President 1x
Shares counted toward these requirements include common shares held directly or through a broker, common
shares held under the Savings Plan or Supplemental Savings Plan, unvested restricted stock, and vested but
unexercised in-the-money stock options. Each outside director that served on the Board when these requirements
were adopted in March 2008 must meet the requirements on the date of the 2013 annual meeting of shareholders
and at subsequent annual meetings. Each EMC member that was an EMC member when these requirements were
adopted must meet the requirements on the date that adjustments to annual executive compensation are made
in 2013 and on subsequent annual adjustment dates. Directors elected and executives hired or promoted after
the adoption of the requirements must meet the requirements on the first testing date for directors or executives
following the fifth anniversary of their election, hire or promotion, as applicable. As of March 9, 2012, each of our
outside directors and each EMC member would have complied with our minimum share ownership requirements.
In addition to the minimum share ownership requirements, we do not allow our directors or named executive
officers to enter into any hedging or monetization transactions of our common shares.
Equity Grant Timing
Pursuant to the terms of the 2005 LTIP, the grant date of equity awards must be the later of the date the terms of
the award are established by corporate action or the date specified in the award agreement. Consistent with prior
years, in fiscal 2011, the outside directors, after consultation with the Committee, specified that the grant date of
the equity awards made in connection with the annual performance reviews of the EMC members was the second
trading day following our release of fiscal 2010 results. This future date was established to allow the market to
absorb and react to our release of material non-public information, and to avoid any suggestion that the Board, the
Committee or any employee manipulated the terms of the equity awards. For equity awards made throughout the
fiscal year, which generally are made as a result of a hiring or promotion, the grant date is the date of the related
event (i.e., the first day of employment or effective date of promotion). We have no policy of timing the grant date
of these mid-year equity awards with the release of material non-public information, and we have not timed the
release of material non-public information for the purpose of affecting the value of any equity awards.