Dollar General 2007 Annual Report Download - page 128

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automobile, pay for gasoline, repairs, service, and insurance and provide a gross-up payment to
pay the tax cost of the imputed income.
We also provide a relocation assistance program to NEOs similar to that offered to
certain other employees. In 2007, we incurred relocation expenses in accordance with this policy
for Mr. Buley and Mr. Dreiling (as discussed below in “Compensation of Mr. Dreiling”). The
significant differences of the relocation assistance available to NEOs from the relocation
assistance available to other employees are as follows:
• We provide a pre-move allowance of 5% of the NEO’ s annual base salary (we cap
this allowance at $5,000 for other employees);
• We provide home sale assistance by offering to purchase the NEO’ s prior home at an
independently determined appraised value in the event the prior home is not sold to
an outside buyer (we do not offer this service to other employees);
• We reimburse NEOs for all reasonable and customary home purchase closing costs
(we limit our reimbursement to other employees to 2% of the purchase price to a
maximum of $2,500) except for loan origination fees which are limited to 1%; and
• We provide 60 days of temporary living expenses (we limit temporary living
expenses to 30 days for all other employees).
As an exception to the NEO relocation policy, the Committee extended the temporary
housing benefit in 2007 to Mr. Beré beyond the 60 day limit due to uncertainties arising from the
Merger.
Compensation of Mr. Perdue
While Mr. Perdue’ s compensation reflected an emphasis on achieving both short and
long-term performance results, more emphasis was placed on long-term performance goals. This
is generally typical for CEO compensation structures as it aligns their compensation more
directly with that of shareholders, i.e., the creation of long-term economic value in the company.
As a result of the risk associated with the long-term component being such a large portion of his
total compensation and as a part of the decision to extend Mr. Perdue’ s employment contract
with us, his compensation was benchmarked closer to the 75th percentile of the market
comparator group.
In 2007, the Committee reviewed Mr. Perdue’ s assessment of his overall performance to
determine as a threshold matter his eligibility for a base salary increase. This review included
Mr. Perdue’ s performance versus his previously established 2006 goals, which included
measures relating to the sell off of inventory and the closing of stores as a part of Project Alpha;
increasing the discipline in the planning and buying process including private label development
and SKU rationalization; enhanced domestic sourcing and continued reduction of costs through
the supply chain; enhancing the customer experience in the store through shrink reduction,
reduced store manager turnover and the development of measurements of store standards; and