Dollar General 2010 Annual Report Download - page 65

Proxy
Compensation Committee Interlocks and Insider Participation
Each of Messrs. Agrawal, Bryant, Calbert, Jones and Rhodes was a member of our
Compensation Committee during 2010. None of these persons was at any time during 2010 an officer
or employee of Dollar General or any of our subsidiaries or an officer of Dollar General or any of our
subsidiaries at any time prior to fiscal 2010. Messrs. Calbert and Agrawal, due to their relationships
with KKR, and Mr. Jones, due to his relationship with Goldman, Sachs & Co., may be viewed as
having an indirect material interest in certain relationships and transactions with KKR and Goldman,
Sachs & Co. discussed under ‘‘Certain Transactions with Management and Others’’ above. Mr. Dreiling
serves as a manager of Buck Holdings, LLC, for which Messrs. Calbert, Agrawal and Jones serve as
managers.
Compensation Risk Considerations
In March 2010, our Compensation Committee, with the assistance of its compensation
consultant and management, reviewed our compensation policies and practices for all employees,
including executive officers, to assess the risks that may arise from our compensation programs. The
assessment included a review of our compensation programs for certain design features which could
potentially encourage excessive risk-taking or otherwise generate risk to Dollar General. As a result of
that assessment, management and the Compensation Committee concluded, after considering the
degree to which identified risk-aggravating factors were offset by risk-mitigating factors, that the net
risks created by our overall compensation program were not reasonably likely to have a material
adverse effect on Dollar General. Several of the design features that were noted as reducing the
likelihood of excessive risk-taking or otherwise mitigating risk included:
• The use of a company-wide performance measure for the short-term annual incentive plan
and as a vesting condition for the performance-based stock options granted under the
long-term equity incentive plan;
• A minimum share purchase requirement for participation in the long-term equity incentive
plan;
• Relatively long vesting periods for equity awards, as well as restrictions on transferability of
vested shares; and
• Compensation program balance (a) between elements that focus on short-term financial
performance and those that reward for longer-term stock price appreciation; and (b) between
fixed and variable pay.
Throughout 2010, the Committee continued to discuss risks pertaining to various compensation
programs during meetings at which changes to any such programs were discussed. In addition, in March
2011 the Committee reviewed and discussed a management presentation confirming that our
compensation programs have undergone few changes, analyzing those changes, and determining that
the risk profile identified in the March 2010 risk assessment has not significantly changed. As a result
of this review and discussion, which included identification of further risk-mitigating factors such as the
use of an additional company-wide performance measure for the short-term cash incentive plan and the
comprehensive management succession plan, the Committee again determined that the net risks
created by our overall compensation program are not reasonably likely to have a material adverse
effect on Dollar General.
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