Kroger 2014 Annual Report Download - page 35
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Thevalueoftheperformance-basedawards,orperformanceunits,reflectedinthetableisasfollows:
Mr. McMullen: $965,438; Mr. Schlotman: $257,450; Mr. Ellis: $289,631; Ms. Barclay: $225,269;
Mr.Donnelly:$193,088;andMr.Dillon:$346,579.Theseamountsreflecttheaggregatefairvalueatthe
grantdatebasedontheprobableoutcomeoftheperformanceconditions.Theseamountsareconsistent
withtheestimateofaggregatecompensationcosttoberecognizedbytheCompanyoverthethree-year
performanceperiodoftheawarddeterminedasofthegrantdateunderFASBASCTopic718,excluding
theeffectofestimatedforfeitures.Duetohisretirement,Mr.Dillon’sperformanceunitswillbeprorated
withservicecreditedthroughFebruary28,2015andthatproratedamountisreportedinthetable.Prior
toprorating,theaggregatefairvalueatthegrantdateofhisperformanceunitswas$965,438.
Assuming that the highest level of performance conditions is achieved, the aggregate fair value of the
performance unit awards at the grant date is as follows: Mr. McMullen: $1,930,875; Mr. Schlotman:
$514,900;Mr.Ellis:$579,263;Ms.Barclay:$450,538;Mr.Donnelly:$386,175;andMr.Dillon:$693,158.
Theseamountsarerequiredtobereportedinafootnoteandarenotreflectedinthetable.Duetohis
retirement,Mr.Dillon’sperformanceunitswillbeproratedwithservicecreditedthroughFebruary28,
2015.Priortoprorating,theaggregatefairvalueofhisperformanceunitsassumingthehighestlevelof
performanceconditionsisachievedwas$1,930,875.
TheassumptionsusedincalculatingthevaluationsaresetforthinNote12totheconsolidatedfinancial
statementsinKroger’s10-Kforfiscalyear2014endedJanuary31,2015.
(3) Theseamountsrepresenttheaggregategrantdatefairvalueofoptionawardscomputedinaccordance
withFASBASCTopic718.TheassumptionsusedincalculatingthevaluationsaresetforthinNote12to
theconsolidatedfinancialstatementsinKroger’s10-Kforfiscalyear2014endedJanuary31,2015.
(4) Non-equityincentiveplan compensationearned for2014 consists ofamounts earnedunderthe2014
performance-based annual cash bonus program and the 2012 performance-based long-term cash
bonusplan.
Inaccordancewiththetermsofthe2014performance-basedannualcashbonusprogram,Krogerpaid
121.5%ofbonuspotentialsfortheexecutiveofficers,includingthenamedexecutiveofficers.Payments
weremadeinthefollowingamounts:Mr.McMullen: $1,831,846; Mr. Schlotman: $668,250; Mr.Ellis:
$942,793;Ms.Barclay:$668,250;Mr.Donnelly:$668,250;andMr.Dillon:$1,494,450.Theseamounts
wereearnedwithrespecttoperformancein2014andpaidinMarch2015.
The2012Long-TermCashBonusPlanisaperformance-basedbonusplandesignedtorewardparticipants
forimprovingthelong-termperformanceoftheCompany.Theplancoveredperformanceduringfiscal
years2012,2013and2014andamountsearnedundertheplanwerepaidinMarch2015.Thecashbonus
potentialamountequaledtheexecutive’ssalaryineffectonthelastdayoffiscal2011.Thefollowing
amountsrepresentpayoutsat67%ofthebonuspotentialsthatwereearnedundertheplan:Mr.McMullen:
$609,700;Mr.Schlotman:$435,500;Mr.Ellis:$316,508;Ms.Barclay:$439,520;Mr.Donnelly:$356,011;
andMr.Dillon:$864,300.
(5) Amountsreportedfor2014and2012includethechangeintheactuarialpresentvalueofaccumulated
pensionbenefitsandpreferentialearningsonnonqualifieddeferredcompensation.Amountsreported
for2013includeonlypreferentialearningsonnonqualifieddeferredcompensationbecausethechanges
inpensionvaluewerenegative,whicharenotrequiredtobereportedinthetableinaccordancewith
SECrules.Ms.Barclaydoesnotparticipateinadefinedbenefitpensionplanornonqualifieddeferred
compensationplan.Pensionvaluesmayfluctuatesignificantlyfromyeartoyeardependingonanumber
of factors, including age, years of service, average annual earnings and the assumptions used to determine
the present value, such as the discount rate. The change in the actuarial present value of accumulated
pensionbenefitsfor2014wassignificantlygreaterthan2013and2012primarilyduetoalowerdiscount
rate and revised mortality assumptions for 2014. Please see the Pension Benefits section for further
informationregardingtheassumptionsusedincalculatingpensionbenefits.
UndertheCompany’snonqualifieddeferredcompensationplan,deferredcompensationearnsinterest
ataraterepresentingKroger’scostof ten-yeardebt,asdeterminedbytheCEOandreviewedbythe
CompensationCommitteepriortothebeginningofeachdeferralyear.Foreachparticipant,aseparate