Dollar General 2012 Annual Report Download - page 36

Proxy
The Committee assessed the independence of Meridian pursuant to SEC rules and did not
identify any relationships that could be viewed as conflicts of interest.
Management’s Role. Mr. Ravener and non-executive members of the human resources group
have assisted Meridian in gathering and analyzing relevant competitive data and identifying and
evaluating various alternatives for named executive officer compensation (including his own). At the
Compensation Committee’s request, management’s role in collecting this type of data expanded
beginning in 2012, including increased reliance on management with respect to recommendations for
certain portions of 2012 and 2013 executive compensation. Messrs. Dreiling and Ravener also discuss
with the Committee their recommendations regarding named executive officer pay components,
typically based on benchmarking data; however, Mr. Dreiling does not participate in the Committee’s
deliberations of his own compensation. Mr. Dreiling subjectively assesses performance of each of the
other named executive officers (see ‘‘Use of Performance Evaluations’’ below).
Although the Committee values and solicits such input from management, it retains and
exercises sole authority to make decisions regarding named executive officer compensation.
Use of Performance Evaluations. Annually, the Compensation Committee assesses the
performance of Mr. Dreiling, and Mr. Dreiling assesses the performance of each of the other named
executive officers, in each case to determine each such officer’s overall success in meeting or exhibiting
certain enumerated factors, including our four publicly disclosed operating priorities and certain core
attributes on which all of our employees are evaluated. These evaluations are subjective; no objective
criteria or relative weighting is assigned to any individual factor.
The Committee uses the performance evaluation results as an eligibility threshold for annual
base salary increases and Teamshare bonus payments for named executive officers. A performance
rating below ‘‘good’’ (i.e., ‘‘unsatisfactory’’ or ‘‘needs improvement’’) for the last completed fiscal year
would generally preclude a named executive officer from receiving any annual base salary increase or
Teamshare bonus payment (although the Committee retains discretion to approve a Teamshare bonus
payment in the event of a ‘‘needs improvement’’ rating). The performance evaluation results have not
been used to determine the amount of the Teamshare bonus payment for any named executive officer;
rather, the Teamshare bonus amount is determined solely based upon the Company’s level of
achievement of pre-established financial performance measures and the terms of the Teamshare
program (see discussion below). Each named executive officer received a satisfactory (i.e., ‘‘good,’’
‘‘very good,’’ or ‘‘outstanding’’) overall performance evaluation with respect to each of 2011 and 2012
(Mr. Sparks was hired in 2012; accordingly, he was only subject to a performance evaluation for 2012).
The performance evaluation results also may impact the amount of an officer’s annual base
salary increase. Any named executive officer who receives a satisfactory performance rating is given a
percentage base salary increase that equals the overall budgeted increase for the Company’s U.S.-based
employee population unless:
• the executive’s performance evaluation relative to other executives supports a higher or
lower percentage increase;
• the market benchmarking data indicate that an upward market adjustment would more
closely align compensation with the median of the market comparator group;
• an additional or exceptional event occurs, such as an internal equity adjustment, a
promotion or a change in responsibilities, or a similar one-time adjustment is required;
and/or
• the Committee believes any other reason justifies a variation from the overall budgeted
increase.
Actual annual base salary determinations are discussed under ‘‘Elements of Named Executive
Compensation—Base Salary’’ below.
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