Dollar General 2015 Annual Report Download - page 38

Proxy
None of the named executive officers received an unsatisfactory performance rating for either
2014 or, for those who remained employed in 2016 and therefore underwent a performance evaluation,
in 2015.
Use of Market Benchmarking Data. The Compensation Committee approves, periodically
reviews, and utilizes a market comparator group when making compensation decisions (see ‘‘Philosophy
and Objectives’’). The market comparator group consists of companies selected according to their
similarity to our operations, services, revenues, markets, availability of information, and any other
information the Committee deems appropriate. Such companies are likely to have executive positions
comparable in breadth, complexity and scope of responsibility to ours.
Our market comparator group for 2015 compensation decisions consisted of:
AutoZone Family Dollar Office Depot Staples
J.C. Penney The Gap Macy’s Ross Stores
TJX Companies Kohl’s Starbucks L Brands
Dollar Tree Rite Aid Yum! Brands
For each named executive officer position below CEO, the Committee biennially considers
market comparator group data provided by Meridian. In alternating years, the Committee instead uses
prior year data after applying an aging factor recommended by Meridian. Meridian annually provides
market data for the CEO to ensure that the Committee is aware of any significant movement in CEO
compensation levels within the market comparator group. For the 2015 named executive officer
compensation decisions, the Committee considered data provided by Meridian using Aon Hewitt’s
database for the 2015 market comparator group. For Messrs. Flanigan, Ravener and Sparks, for whom
insufficient market comparator group data was available, the Committee used data from a broader
group of retailers comprising a subset of companies included within the Aon Hewitt Total
Compensation MeasurementTM (TCM) database. A list of such companies is included as Appendix A
attached to this proxy statement. In determining the short-term cash and long-term equity targets for
named executive officer positions below Chief Operating Officer, the Committee considers blended
market values for comparable positions, rather than values for individual positions, provided in the data
above from Meridian.
Elements of Named Executive Officer Compensation
We provide compensation in the form of base salary, short-term cash incentives, long-term
equity incentives, benefits and limited perquisites. We believe each of these elements is a necessary
component of the total compensation package and is consistent with compensation programs at
companies with whom we compete both for business and talent.
In connection with his planned retirement on January 29, 2016, all decisions regarding
Mr. Dreiling’s 2015 compensation were negotiated in connection with his employment transition
agreement. Accordingly, with certain exceptions that are specifically identified, the discussion below of
2015 compensation decisions and related actions excludes those pertaining to Mr. Dreiling, which are
instead discussed under ‘‘CEO Employment Transition Agreement’’ below.
In addition, each of Messrs. Vasos and Garratt received compensation adjustments during the
year as a result of their promotions. To determine such compensation adjustments, the Compensation
Committee evaluated the appropriate level of total compensation as well as the appropriate level and
mix of compensation elements considering the market comparator group data and each such officer’s
level of experience and qualifications and recent compensation. In addition, for Mr. Garratt’s
short-term and long-term incentive compensation, the Committee considered the target levels
applicable to our other executive vice presidents. The resulting promotion-related adjustments are set
forth in the discussion below.
26