Dollar General 2007 Annual Report Download - page 120
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118
Compensation Discussion and Analysis
Executive Compensation Philosophy and Objectives
We strive to attract, retain and motivate persons with superior ability, to reward
outstanding performance, and to align our NEOs’ and shareholders’ long-term interests. Our
material compensation principles applicable to 2007 NEO compensation included the following,
all of which are discussed in more detail in “Elements of 2007 NEO Compensation” below:
• We generally target total compensation at the benchmarked median of our market
comparator group, but we make adjustments based on circumstances, such as unique
job descriptions and our particular niche in the retail sector, that are not reflected in
the market data. For competitive reasons, our levels of total compensation or for any
component of compensation may exceed median.
• We set base salaries to reflect the responsibilities, experience and contributions of the
NEOs and the salaries for comparable benchmarked positions, subject to minimums
set forth in employment agreements.
• We emphasize pay for performance and reward NEOs who enhance our performance.
We accomplish this by linking cash incentives to the achievement of our financial
goals and through subjective evaluations of the NEOs’ contributions to the
achievement of our business goals.
• We promote ownership of our common stock to align the interests of our NEOs with
those of our shareholders.
Beginning in 2004 (2003 with respect to Mr. David Perdue), the Compensation
Committee authorized employment agreements with NEOs which, among other things, set forth
minimum levels of certain compensation components because the Committee believed, based on
benchmarking data, that such arrangements were a common protection offered to NEOs at
comparable companies and because contracts were needed to ensure continuity and to retain
NEOs to execute changes necessary to meet our strategic objectives. The Committee also wanted
to give standard protections to both the NEOs and to us upon the termination of any NEO’ s
employment.
Compensation Process
Oversight of 2007 NEO Compensation. Prior to the Merger, the Compensation
Committee was responsible for recommending CEO compensation to the independent directors
of our Board and for approving compensation of other NEOs. The independent directors of the
Board retained sole authority to determine CEO compensation. Prior to the Merger, the
Committee members were Messrs. Dennis Bottorff, Reginald Dickson and E. Gordon Gee.
Subsequent to the Merger, our Board made all executive compensation decisions until a new
Compensation Committee was established in March 2008.