Kroger 2012 Annual Report Download - page 48

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AD V I S O R Y V O T E O N E X E C U T I V E C O M P E N S A T I O N
( I T E M N O. 2 )
The฀Dodd-Frank฀Wall฀Street฀Reform฀and฀Consumer฀Protection฀Act,฀enacted฀in฀July฀2010,฀requires฀that฀
we give our shareholders the right to vote to approve, on a nonbinding, advisory basis, the compensation of
our named executive officers as disclosed earlier in this proxy statement in accordance with the SEC’s rules.
As discussed earlier in our Compensation Discussion and Analysis,฀our฀compensation฀philosophy฀is฀to:
•฀ make฀total฀compensation฀competitive;
•฀ include฀opportunities฀for฀equity฀ownership฀as฀part฀of฀compensation;฀and
•฀ use฀incentive฀compensation฀to฀help฀drive฀performance฀by฀providing฀superior฀pay฀for฀superior฀results.
Furthermore, as previously disclosed, an increased percentage of total potential compensation is
performance-based as opposed to time-based as half of the compensation previously awarded to the named
executive฀officers฀as฀restricted฀stock฀(and฀earned฀based฀on฀the฀passage฀of฀time)฀is฀now฀only฀earned฀to฀the฀
extent that performance goals are achieved. In addition, annual and long-term cash bonuses are performance-
based and earned only to the extent that performance goals are achieved. In tying a large portion of executive
compensation฀to฀achievement฀of฀short-term฀and฀long-term฀strategic฀and฀operational฀goals,฀we฀seek฀to฀closely฀
align the interests of our named executive officers with the interests of our shareholders.
The vote on this resolution is not intended to address any specific element of compensation. Rather, the
vote relates to the compensation of our named executive officers as described in this proxy statement. The
vote is advisory. This means that the vote is not binding on Kroger. The Compensation Committee of our
Board of Directors is responsible for establishing executive compensation. In so doing that Committee will
consider, along with all other relevant factors, the results of this vote.
The affirmative vote of a majority of the shares present and represented in person or by proxy is required
to฀approve฀this฀proposal.฀Broker฀non-votes฀and฀abstentions฀will฀have฀no฀effect฀on฀the฀outcome฀of฀this฀vote.
We฀ask฀our฀shareholders฀to฀vote฀on฀the฀following฀resolution:
“RESOLVED, that the compensation paid to the company’s named executive officers, as disclosed
pursuant to Item 402 of Regulation S-K, including Compensation Discussion and Analysis, compensation
tables, and narrative discussion, is hereby APPROVED.”
TH E B O A R D O F D I R E C T O R S R E C O M M E N D S A V O T E F O R T H I S P R O P O S A L .
SE L E C T I O N O F A U D I T O R S
( I T E M N O. 3 )
The Audit Committee of the Board of Directors is responsible for the appointment, compensation and
retention฀of฀Kroger’s฀independent฀auditor,฀as฀required฀by฀law฀and฀by฀applicable฀NYSE฀rules.฀On฀March฀13,฀
2013, the Audit Committee appointed PricewaterhouseCoopers LLP as Kroger’s independent auditor for the
fiscal year ending February 1, 2014. While shareholder ratification of the selection of PricewaterhouseCoopers
LLP as Kroger’s independent auditor is not required by Kroger’s Regulations or otherwise, the Board of
Directors is submitting the selection of PricewaterhouseCoopers LLP to shareholders for ratification, as it has
in past years, as a good corporate governance practice. If the shareholders fail to ratify the selection, the Audit
Committee may, but is not required to, reconsider whether to retain that firm. Even if the selection is ratified,
the Audit Committee in its discretion may direct the appointment of a different auditor at any time during the
year if it determines that such a change would be in the best interests of Kroger and its shareholders.
A representative of PricewaterhouseCoopers LLP is expected to be present at the meeting to respond to
appropriate฀questions฀and฀to฀make฀a฀statement฀if฀he฀or฀she฀desires฀to฀do฀so.
TH E B O A R D O F D I R E C T O R S R E C O M M E N D S A V O T E F O R T H I S P R O P O S A L .