Kroger 2014 Annual Report Download - page 28
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The2014targetsestablishedbytheCommittee,theactualfiscal2014results,andthebonuspercentage
earnedineachofthecomponentsofannualcashbonuswereasfollows:
Targets Actual
Performance
Actual
Performance
Compared to
100% Target Amount EarnedComponent Minimum 100%
IdenticalSaleswithoutsupermarket
fuel(30%) . . . . . . . . . . . . . . . . . . . 1.00% 3.00% 5.17% 172.33% 49.01%
EBITDAwithoutsupermarket
fuel(30%) . . . . . . . . . . . . . . . . . . . $4.0004Billion $4.7064Billion $4.7719Billion 101.39% 39.59%
StrategicPlan(30%). . . . . . . . . . . . . . . ** ** ** ** 8.40%
TotalOperatingCostsaspercentage
ofsales,excludingfuel(10%)* . . .
Overbudgetby
25basispoints
Overbudgetby
5basispoints
Underbudgetby
14basispoints
19basispoints
under target 19.50%
FuelBonus(5%) . . . . . . . . . . . . . . . . . . [Asdescribedinthetextabove] 5.00%
TotalEarned. . . . . . . . . . . . . . . . . . . . . 121.50%
* TotalOperatingCostswerebudgetedat26.48%asapercentageofsalesforfiscalyear2014.
** TheStrategicPlancomponentalsowasestablishedbytheCommitteeatthebeginningoftheyear,butis
not disclosed as it is competitively sensitive.
Followingthe closeofthe year,the CommitteereviewedKroger’s performance against the identical
sales without supermarket fuel, EBITDA without supermarket fuel, strategic plan objectives, and total
operatingcostsasapercentofsales,excludingfuel,anddeterminedtheextenttowhichKrogerachieved
thoseobjectives.DuetoourperformancewhencomparedtothetargetsestablishedbytheCommittee,and
basedonthebusinessplanadoptedbytheBoard,thenamedexecutiveofficersearned121.5%oftheirbonus
potentials. This is the same bonus percentage payout received by all other participants in the corporate
annualbonusplan.
In2014,asinallyears,theCommitteeretaineddiscretiontoreducethebonuspayoutforallexecutive
officers,includingthenamedexecutiveofficers,iftheCommitteedeterminedforanyreasonthatthebonus
payoutswerenotappropriategiventheirassessmentofCompanyperformance.Theindependentdirectors
retainedthatdiscretionfortheCEO’sbonus.Thosebodiesalsoretaineddiscretiontoadjustthetargetsunder
theplanshouldunanticipateddevelopmentsariseduringtheyear.Noadjustmentsweremadetothetargets
in2014.TheCommittee,andtheindependentdirectorsinthecaseoftheCEO,determinedthatthebonus
payoutsforthenamedexecutiveofficers,thatwereearnedbasedon2014performance,shouldnotbeadjusted.
The percentage paid for 2014 represented excellent performance that exceeded our business plan
objectives.Acomparisonofbonuspercentagesforthenamedexecutiveofficersinprioryearsdemonstrates
thevariabilityofannualcashbonusincentivecompensationanditsstronglinkstoourperformance:
Fiscal Year
Annual Cash Bonus
Percentage
2014 121.500%
2013 104.949%
2012 85.881%
2011 138.666%
2010 53.868%
2009 38.450%
2008 104.948%
2007 128.104%
2006 141.118%
2005 132.094%