Dollar General 2008 Annual Report Download - page 135

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precluded that named executive officer from receiving an increase in 2008 base salary. A
threshold determination of satisfactory performance did not by itself result in any variation in a
named executive officer’ s compensation. Rather, satisfactory performance merely created the
possibility of an increase in base salary. Once a named executive officer’ eligibility was
established, the magnitude of any salary increase was determined on the basis of benchmarking
information from Hewitt regarding the compensation and role of each named executive officer
within our management structure in comparison to the compensation that companies in our
market comparator group provide to similarly situated executives. Because Mr. Dreiling
determined that each such person performed satisfactorily overall, as a threshold matter each
named executive officer was eligible to be considered for a 2008 salary increase.
In determining each named executive officer’ s 2008 base salary, the Compensation
Committee reviewed the composition of the market comparator group, as described above, and
Ms. Lowe informed the Compensation Committee of the results of the benchmarking analysis,
which had been discussed in detail separately with the Committee’ s chairman. This
benchmarking data showed that there was significant movement in the market median for Ms.
Guion’ s position and, as a result, the Committee adjusted her pay accordingly which resulted in
an approximate 15.5% base salary increase. The Committee approved 3% base salary increases
for all other named executive officers (other than Mr. Dreiling, who was not considered for an
increase given his recent hiring in January 2008) in order to maintain base salaries within the
median range of the market comparator group.
Subsequent to the fiscal 2008 year end but prior to the filing of this document, the
Compensation Committee considered the 2009 base salary increases for each named executive
officer. Mr. Dreiling advised the Committee that he had subjectively assessed the overall
performance of each named executive officer and determined that each had performed the duties
and responsibilities of his or her respective position in a satisfactory manner. As in prior years, a
determination of unsatisfactory performance would have precluded that named executive officer
from receiving an increase in base salary, and the threshold determination of satisfactory
performance did not by itself result in any variation in compensation. Rather, satisfactory
performance merely created the possibility of an increase in base salary. The magnitude of the
salary increase was determined on the basis of benchmarking information from Hewitt regarding
data from our market comparator group.
After reviewing a summary of the Hewitt data, the Committee determined that a 2.25%
increase in base salary for each named executive officer (other than Mr. Dreiling and Ms
Lanigan) was within the competitive median range of base salary increases within the market
comparator group. The benchmarking data showed that there was additional movement in the
market median for Ms. Lanigan’ s position and, as a result, the Committee adjusted her pay
accordingly which resulted in an approximate 5% base salary increase. All such increases are
effective April 1, 2009.
The Committee also met with Mr. Dreiling privately to subjectively review his
performance in fiscal 2008 in the context of his job responsibilities. The Committee determined
that Mr. Dreiling’ s fiscal 2008 performance was satisfactory on an overall basis, thus also
qualifying him for a 2009 base salary increase. As with other named executive officers, such
determination did not by itself result in any variation in Mr. Dreiling’ s compensation, but rather