Dollar General 2008 Annual Report Download - page 133

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The written agreement with Hewitt specifies that Hewitt may perform compensation
consulting services upon management or Committee request, which services may include
competitive market pay analyses, support regarding legal, regulatory or accounting
considerations impacting compensation programs, redesign of those programs, assistance with
market data, trends and competitive practices, meeting preparation and attendance and other
miscellaneous work.
While the Committee or any of its members may consult directly with Hewitt should it or
they choose to do so, subsequent to the Merger Hewitt has directly dealt solely with Mr.
Dreiling, Ms. Challis Lowe (while she served as our EVP of Human Resources) and Mr. Robert
Ravener (since he became our SVP and Chief People Officer) (Ms. Lowe or Mr. Ravener, during
the applicable time period, our “Senior HR Officer”), as well as with non-executive members of
our human resources group, both with respect to management’ s work in connection with named
executive officer compensation (as described below under “Management’ s Role”) and in
connection with general employee compensation and benefits matters. Our Committee
Chairman, Mr. Calbert, reviews with Mr. Dreiling and our Senior HR Officer information
provided by Hewitt, along with Mr. Dreiling’ s and our Senior HR Officer’ s executive
compensation recommendations.
Management’s Role. Mr. Dreiling and the Senior HR Officer, along with non-executive
members of the human resources group, assist Hewitt in gathering and analyzing relevant
competitive data and identifying and evaluating various alternatives for named executive officer
compensation (including their own). Mr. Dreiling and the Senior HR Officer regularly provide
and discuss their recommendations regarding named executive officer pay components, typically
based on Hewitt benchmarking data, to the Compensation Committee Chairman between
Committee meetings and to the full Committee at Committee meetings. Mr. Dreiling assesses
named executive officer performance (with Mr. Bere’ s assistance with respect to fiscal 2007
performance) for purposes of determining whether each named executive officer is eligible, as a
threshold matter, for a base salary increase and for a Teamshare bonus payout in the event the
relevant EBITDA performance level is achieved (each as discussed more fully below under
“Elements of 2008 Named Executive Officer Compensation”).
While the Board and the Committee members valued and welcomed such input from
management, the Board and the Committee ultimately made all 2008 named executive officer
compensation decisions.
Use of Market Benchmarking Data. To attract and retain named executive officers who
we believe will enhance our long-term business results, we must pay compensation that is
competitive with the external market for executive talent. We believe that this primary talent
market consists of retail companies with revenues and business models similar to ours because
those companies have executive positions similar in breadth, complexity and scope of
responsibility to our named executive officer positions. For 2008, Hewitt provided data to
management regarding total and individual compensation elements from its proprietary salary
survey database and from the proxy statements of selected retail companies that met these
criteria. We refer to this combined group as the market comparator group. In 2008, this group
consisted of Advance Auto Parts, AutoZone, Big Lots, Family Dollar, Kohl’ s, Limited Brands,