Dollar General 2013 Annual Report Download - page 38

Management’s Role. Mr. Bob Ravener, our Executive Vice President and Chief People Officer,
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). The Committee’s Chairman periodically consults
directly with Messrs. Dreiling and Ravener, and other non-executive members of our human resources
group, in connection with executive compensation. Messrs. Dreiling and Ravener 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. Each of Mr. Dreiling’s direct reports provides input on Mr. Dreiling’s
performance to Mr. Ravener, and this input is consolidated and provided to the Committee on an
anonymous basis. 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, considering the input of his direct reports and other factors, and
Mr. Dreiling assesses the performance of each of the other named executive officers. These evaluations
are used 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 a pre-established financial performance measure and the terms of the Teamshare
program (see discussion below). Any named executive officer who receives a ‘‘needs improvement’’
performance rating also would receive a reduced level of restricted stock units and stock options. Each
named executive officer received a satisfactory (i.e., ‘‘good,’’ ‘‘very good,’’ or ‘‘outstanding’’) overall
performance evaluation with respect to each of 2012 and 2013.
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 comparator group data indicate that an upward market adjustment would more
closely align compensation with the median range 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.
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