Kroger 2014 Annual Report Download - page 30
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Thefollowingtablesummarizeseachofthelong-termperformancebasedplansfortheyearsshown:
2012 Plan 2013 Plan 2014 Plan 2015 Plan
Performance Period 2012to2014 2013to2015 2014to2016 2015to2017
Payout Date March2015 March2016 March2017 March2018
Cash Bonus Base Salaryatendof
fiscalyear2011*
Salaryatendof
fiscalyear2012*
Salaryatendoffiscal
year2013*
Salaryatendoffiscal
year2014*
Performance Metrics
Strategic Plan 2%payoutperunit
improvement
2%payoutperunit
improvement
2%payoutperunit
improvement
4%payoutperunit
improvement
Reduction in
Operating Cost as a
Percentage of Sales,
Excluding Fuel
0.50%payoutper
0.01%reduction
in operating costs
Baseline:27.09%
0.50%payoutper
0.01%reduction
in operating costs
Baseline:26.69%
0.50%payoutper
0.01%reduction
in operating costs
Baseline:26.68%
0.50%payoutper
0.01%reduction
in operating costs
Baseline:26.41%
Improvement in
Associate Engagement 4%payoutperunit
improvement
4%payoutperunit
improvement
4%payoutperunit
improvement
4%payoutperunit
improvement
Return on Invested
Capital N/A 1%payout
per0.01%
improvement
inROIC
Baseline:13.25%
1%payoutper0.01%
improvementinROIC
Baseline:13.27%
1%payoutper0.01%
improvementinROIC
Baseline:13.74%
* Ordateofplanentry,iflater.
Atthetimeofadoptingnewlong-termplans,theCommitteehasmadeadjustmentstothepercentage
payouts for the components of the long-term plans to account for the increasing difficulty of achieving
compounded improvement.
The Committee anticipates adopting a new plan each year, measuring improvement over successive
three-yearperiods.
Thelong-termperformancebasedplanadoptedin2012,whichmeasuredimprovementsthroughfiscal
year2014,paidoutinMarch2015andwascalculatedasfollows:
Component Baseline Result Improvement Multiplier
Percentage
Earned
StrategicPlan . . . . . . . . . . . . . . . . . . . . . * * 9unitsofimprovement 2.00% 18.00%
AssociateEngagement . . . . . . . . . . . . . . * * 4unitsofimprovement 4.00% 16.00%
TotalOperatingCosts,asaPercentage
ofSales,ExcludingFuel . . . . . . . . . . 27.0 9 % 26.43% 66basispointimprovement 0.50% 33.00%
TotalEarned . . . . . . . . . . . . . . . . . . . . . . 67.00%
* The StrategicPlan andAssociateEngagement componentswereestablishedbythe Committeeatthe
beginningoftheperformanceperiod,butarenotdisclosedastheyarecompetitivelysensitive.
Accordingly,eachnamedexecutiveofficerreceivedcashinanamountequalto67%ofthatexecutive’s
long-termcashbonusbase,andwasissuedthenumberofKrogercommonsharesequalto67%ofthenumber
ofperformanceunitsawardedtothatexecutive,alongwithacashamountequaltothedividendspaidonthat
number of common shares during the three year performance period. Payout for the cash components of
the2012planarereportedinthe“Non-EquityIncentivePlanCompensation”and“AllOtherCompensation”
columnsoftheSummaryCompensationTableandfootnotes4and6tothattable,andthecommonsharesissued
undertheplanarereportedinthe2014OptionExercisesandStockVestedTableandfootnote2tothattable.