Dollar General 2014 Annual Report Download - page 38

Proxy
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. For 2013, the Compensation Committee assessed the
performance of Mr. Dreiling, considering Mr. Dreiling’s input, the anonymous input of his direct
reports as consolidated by Mr. Ravener, and other factors. In addition, Mr. Dreiling assessed the
performance of each of the other named executive officers and reported to the Committee whether
each named executive officer (other than himself) performed satisfactorily. A similar process was
followed to evaluate each named executive officer’s 2014 performance other than Mr. Dreiling.
Mr. Dreiling’s 2014 performance evaluation was instead subsumed within the negotiations surrounding
his employment transition agreement as discussed under ‘‘CEO Employment Transition Agreement’’
below.
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 overall performance evaluation results as an eligibility threshold for
annual base salary increases and Teamshare bonus payments for named executive officers. An overall
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 2013 and 2014.
The performance evaluation results also may impact the amount of a named executive 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 within a reasonable range of 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.
Use of Market Benchmarking Data. The Compensation Committee utilizes a market
comparator group when making compensation decisions (see ‘‘Executive Compensation Philosophy and
Objectives’’ above). The market comparator group is approved by the Committee and consists of
companies selected according to their similarity to our operations, services, revenues and markets.
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