Kroger 2013 Annual Report Download - page 19

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17
CO M M U N I C A T I O N S W I T H T H E B O A R D
The฀ Board฀ has฀ established฀ two฀ separate฀ mechanisms฀ for฀ shareholders฀ and฀ interested฀ parties฀ to฀
communicate฀with฀the฀Board.฀Any฀shareholder฀or฀interested฀party฀who฀has฀concerns฀regarding฀accounting,฀
improper฀use฀of฀Kroger฀assets,฀or฀ethical฀improprieties฀may฀report฀these฀concerns฀via฀the฀toll-free฀hotline฀
(800-689-4609)฀ or฀ email฀ address฀ (helpline@kroger.com)฀ established฀ by฀ the฀ Board’s฀ Audit฀ Committee.฀ The฀
concerns฀ are฀ investigated฀ by฀ Kroger’s฀ Vice฀ President฀ of฀ Auditing฀ and฀ reported฀ to฀ the฀ Audit฀ Committee฀ as฀
deemed฀appropriate฀by฀the฀Vice฀President฀of฀Auditing.
Shareholders฀or฀interested฀parties฀also฀may฀communicate฀with฀the฀Board฀in฀writing฀directed฀to฀Kroger’s฀
Secretary฀at฀our฀executive฀offices.฀The฀Secretary฀will฀consider฀the฀nature฀of฀the฀communication฀and฀determine฀
whether฀to฀forward฀the฀communication฀to฀the฀chair฀of฀the฀Corporate฀Governance฀Committee.฀Communications฀
relating฀to฀personnel฀issues฀or฀our฀ordinary฀business฀operations,฀or฀seeking฀to฀do฀business฀with฀us,฀will฀be฀
forwarded฀to฀the฀business฀unit฀of฀Kroger฀that฀the฀Secretary฀deems฀appropriate.฀All฀other฀communications฀will฀
be฀forwarded฀to฀the฀chair฀of฀the฀Corporate฀Governance฀Committee฀for฀further฀consideration.฀The฀chair฀of฀the฀
Corporate฀Governance฀Committee฀will฀take฀such฀action฀as฀he฀or฀she฀deems฀appropriate,฀which฀may฀include฀
referral฀to฀the฀Corporate฀Governance฀Committee฀or฀the฀entire฀Board.
AT T E N D A N C E
The฀Board฀of฀Directors฀held฀seven฀meetings฀in฀2013.฀During฀2013,฀all฀incumbent฀directors฀attended฀at฀
least฀75%฀of฀the฀aggregate฀number฀of฀meetings฀of฀the฀Board฀and฀committees฀on฀which฀that฀director฀served.฀
Members฀of฀the฀Board฀are฀expected฀to฀use฀their฀best฀efforts฀to฀attend฀all฀annual฀meetings฀of฀shareholders.฀All฀
fourteen members฀then฀serving฀on฀the฀Board฀attended฀last฀year’s฀annual฀meeting.
CO M P E N S A T I O N C O N S U L T A N T S
The฀Compensation฀Committee฀directly฀engages฀a฀compensation฀consultant฀from฀Mercer฀Human฀Resource฀
Consulting to advise the Committee in the design of compensation for executive officers. In 2013, Kroger paid
that฀consultant฀$375,944฀for฀work฀performed฀for฀the฀Committee.฀Kroger,฀on฀management’s฀recommendation,฀
retained฀the฀parent฀and฀affiliated฀companies฀of฀Mercer฀Human฀Resource฀Consulting฀to฀provide฀other฀services฀
for฀Kroger฀in฀2013,฀for฀which฀Kroger฀paid฀$4,743,100.฀These฀other฀services฀primarily฀related฀to฀insurance฀
claims฀(for฀which฀Kroger฀was฀reimbursed฀by฀insurance฀carriers฀as฀claims฀were฀adjusted),฀insurance฀brokerage฀
and฀bonding฀commissions,฀and฀pension฀consulting.฀Kroger฀also฀made฀payments฀to฀affiliated฀companies฀for฀
insurance฀premiums฀that฀were฀collected฀by฀the฀affiliated฀companies฀on฀behalf฀of฀insurance฀carriers,฀but฀these฀
amounts฀are฀not฀included฀in฀the฀totals฀referenced฀above,฀as฀the฀amounts฀were฀paid฀over฀to฀insurance฀carriers฀
for฀services฀provided฀by฀those฀carriers.฀Although฀neither฀the฀Committee฀nor฀the฀Board฀expressly฀approved฀
the฀ other฀ services,฀ after฀ taking฀ into฀ consideration฀ the฀ NYSE’s฀ independence฀ standards฀ and฀ the฀ SEC฀ rules,฀
the฀Committee฀determined฀that฀the฀consultant฀is฀independent฀and฀his฀work฀has฀not฀raised฀any฀conflict฀of฀
interest฀because฀(a)฀he฀was฀first฀engaged฀by฀the฀Committee฀before฀he฀became฀associated฀with฀Mercer;฀(b)฀he฀
works฀exclusively฀for฀the฀Committee฀and฀not฀for฀our฀management;฀(c)฀he฀does฀not฀benefit฀from฀the฀other฀
work฀that฀Mercer’s฀parent฀and฀affiliated฀companies฀perform฀for฀Kroger;฀and฀(d)฀neither฀the฀consultant฀nor฀the฀
consultant’s฀team฀perform฀any฀other฀services฀on฀behalf฀of฀Kroger.
No฀member฀of฀the฀Compensation฀Committee฀was฀an฀officer฀or฀employee฀of฀the฀Company฀during฀fiscal฀
year฀2013,฀and฀no฀member฀of฀the฀Compensation฀Committee฀was฀formerly฀an฀officer฀of฀the฀Company฀or฀was฀
a฀party฀to฀any฀disclosable฀related฀person฀transaction฀involving฀the฀Company.฀During฀fiscal฀year฀2013,฀none฀of฀
the฀executive฀officers฀of฀the฀Company฀served฀on฀the฀board฀of฀directors฀or฀on฀the฀compensation฀committee฀
of฀ any฀ other฀ entity฀ that฀ has฀ or฀ had฀ executive฀ officers฀ serving฀ as฀ a฀ member฀ of฀ the฀ Board฀ of฀ Directors฀ or฀
Compensation Committee of the Company.