Dollar General 2013 Annual Report Download - page 36

The most significant compensation-related actions or achievements in 2013 pertaining to our
named executive officers include:
• The Compensation Committee revised the Teamshare program to measure adjusted EBIT
results, which are viewed as a strong indicator of overall organizational performance.
• The Compensation Committee changed the equity awards mix from 75% time-based stock
options and 25% performance share units to 50% time-based stock options, 25%
performance share units and 25% restricted stock units to more closely match the equity
mix used by our market comparator group.
• The Compensation Committee adjusted the weight of the performance measures for
performance share units from 90% adjusted EBITDA and 10% ROIC to 50% adjusted
EBITDA and 50% ROIC to put greater emphasis on maintaining ROIC at an acceptable
level to help ensure that invested capital is providing an appropriate return over time.
• The 2013 tranche of the outstanding performance-based equity awards granted prior to
2012 vested as a result of our achievement of the 2013 adjusted EBITDA performance
goal.
• The performance share units granted in March 2013 were earned at a level below the
target for ROIC, but the threshold level for adjusted EBITDA was not obtained.
• In November 2013, Mr. Vasos was promoted to Chief Operating Officer, and in connection
therewith, the Compensation Committee approved a new compensation package for
Mr. Vasos based on information derived from market comparator group data which
targeted the median range of the market comparator group.
• We amended our Insider Trading Policy to prohibit our directors and executive officers
from hedging their ownership of Dollar General stock.
Executive Compensation Philosophy and Objectives
We strive to attract, retain and motivate persons with superior ability, to reward outstanding
performance, and to align the long-term interests of our named executive officers with those of our
shareholders. The material compensation principles applicable to the compensation of our named
executive officers are summarized below and discussed in more detail in ‘‘Elements of Named
Executive Officer Compensation’’:
• We generally target total compensation at the benchmarked median range of total
compensation of comparable positions within our market comparator group, but we make
adjustments based on circumstances, such as unique job descriptions and responsibilities as
well as our particular niche in the retail sector, that are not reflected in the market data.
For competitive or other reasons, our levels of total compensation or any component of
compensation may exceed or be below the median of our market comparator group.
• We set base salaries to reflect the responsibilities, experience, performance 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.
• In approving compensation arrangements, we take into consideration the recent
compensation history of the senior officer, including special or unusual compensation
payments, and maintain an appropriate balance between base salary and annual and
long-term incentive compensation.
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