Kroger 2010 Annual Report Download - page 28

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26
Kroger is the second-largest company as measured by annual revenues when compared with the peer
group referenced above and is the largest traditional food and drug retailer. The Committee has therefore
sought to ensure that salaries paid to our executive officers are at or above the median paid by competitors
for comparable positions and to provide an annual bonus potential to our executive officers that, if annual
business plan objectives are achieved, would cause their total cash compensation to be meaningfully above
the median.
CO M P O N E N T S O F EX E C U T I V E CO M P E N S A T I O N A T KR O G E R
Compensation for our named executive officers is comprised of the following:
•฀ Salary;
•฀ Performance-Based฀Annual฀Cash฀Bonus฀(annual,฀non-equity฀incentive฀pay);
•฀ Performance-Based฀Long-Term฀Cash฀Bonus฀(long-term,฀non-equity฀incentive฀pay);
•฀ Equity,฀including฀performance-based฀equity;
•฀ Retirement฀and฀other฀benefits;฀and
•฀ Perquisites.
SA L A R Y
We provide our named executive officers and other employees a fixed amount of cash compensation –
salary – for their work. Salaries for named executive officers (with the exception of the CEO) are established
each year by the Committee. The CEO’s salary is established by the independent directors. Salaries for the
named executive officers were reviewed in June.
The amount of each executive’s salary is influenced by numerous factors including:
•฀ An฀assessment฀of฀individual฀contribution฀in฀the฀judgment฀of฀the฀CEO฀and฀the฀Committee฀(or,฀in฀the฀
case of the CEO, of the Committee and the rest of the independent directors);
•฀ Benchmarking฀with฀comparable฀positions฀at฀peer฀group฀companies;
•฀ Tenure;฀and
•฀ Relationship฀with฀the฀salaries฀of฀other฀executives฀at฀Kroger.
The assessment of individual contribution is based on a subjective determination, without the use of
performance targets, in the following areas:
•฀ Leadership;
•฀ Contribution฀to฀the฀officer฀group;
•฀ Achievement฀of฀established฀objectives,฀to฀the฀extent฀applicable;
•฀ Decision-making฀abilities;
•฀ Performance฀of฀the฀areas฀or฀groups฀directly฀reporting฀to฀the฀officer;
•฀ Increased฀responsibilities;
•฀ Strategic฀thinking;฀and
•฀ Furtherance฀of฀Kroger’s฀core฀values.