Dollar General 2008 Annual Report Download - page 132

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130
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 the interests of our named executive officers with the
long-term interests of our shareholders. The material compensation principles applicable to the
2008 compensation of our named executive officers included the following, all of which are
discussed in more detail in “Elements of 2008 Named Executive Officer 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 any
component of compensation may exceed the median of our comparator group.
• We set base salaries to reflect the responsibilities, experience and contributions of the
named executive officers and the salaries for comparable benchmarked positions,
subject to minimums set forth in employment agreements.
• We reward named executive officers who enhance our performance by linking cash
and equity incentives to the achievement of our financial goals.
• We promote share ownership to align the interests of our named executive officers
with those of our shareholders.
The Compensation Committee of our Board of Directors utilizes employment agreements
with the named executive officers which, among other things, set forth minimum levels of
certain compensation components. The Committee believes such arrangements are a common
protection offered to named executive officers at comparable companies, and help ensure
continuity and aid in retention. The agreements also provide for standard protections to both the
officer and to Dollar General should the officer’ s employment terminate.
Named Executive Officer Compensation Process
Oversight. The Compensation Committee of our Board of Directors is responsible for
recommending CEO compensation to our Board and for approving compensation of other named
executive officers. The Board retains sole authority to determine CEO compensation. The
Committee members include Messrs. Calbert, Agrawal and Jones.
Use of Outside Advisors. Prior to the Merger, the former Compensation Committee
selected Hewitt Associates as its compensation consultant and approved a written agreement
with Hewitt which describes the general terms of the working relationship. Hewitt remains a
consultant to the Company subsequent to the Merger, and while the written agreement with
Hewitt has not been formally renewed, we continue to operate consistent with its terms.