Kroger 2014 Annual Report Download - page 57
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Baseduponthereviewanddiscussionsdescribedinthisreport,theAuditCommitteerecommended
totheBoardofDirectorsthattheauditedconsolidatedfinancialstatementsbeincludedintheCompany’s
AnnualReportonForm10-KfortheyearendedJanuary31,2015,asfiledwiththeSEC.
ThisreportissubmittedbytheAuditCommittee.
RonaldL.Sargent,Chair
SusanJ.Kropf
SusanM.Phillips
BobbyS.Shackouls
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 )
TheDodd-FrankWallStreetReformandConsumerProtectionAct,enactedinJuly2010,requiresthatwe
giveourshareholderstherighttoapprove,onanonbinding,advisorybasis,thecompensationofournamed
executiveofficersasdisclosedearlierinthisproxystatementinaccordancewiththeSEC’srules.
AsdiscussedearlierintheCompensationDiscussionandAnalysis,ourcompensationphilosophyis:
• Asignificantportionofpayshouldbeperformance-based,increasingproportionallywithanexecutive’s
levelofresponsibility;
• Compensation should include incentive-based pay to drive performance, providing superior pay for
superiorperformance,includingbothashort-andlong-termfocus;
• Compensationpoliciesshouldincludeanopportunityfor,andarequirementof,equityownership;and
• Componentsofcompensationshouldbetiedtoanevaluationofbusinessandindividualperformance
measuredagainstmetricsthatalignwithourbusinessstrategy.
Furthermore, as previously disclosed, an increased percentage of total potential compensation is
performance-basedasopposedtotime-basedashalfofthecompensationpreviouslyawardedtothenamed
executiveofficersasrestrictedstock(andearnedbasedonthepassageoftime)isnowonlyearnedtothe
extentthatperformancegoalsareachieved.Inaddition,annualandlong-termcashbonusesareperformance-
basedandearnedonlytotheextentthatperformancegoalsareachieved.Intyingalargeportionofexecutive
compensationtoachievementofshort-termandlong-termstrategicandoperationalgoals,weseektoclosely
aligntheinterestsofournamedexecutiveofficerswiththeinterestsofourshareholders.
The vote on this resolution is not intended to address any specific element of compensation. Rather,
thevoterelatestothecompensationofournamedexecutiveofficersasdescribedinthisproxystatement.
Thevoteisadvisory.ThismeansthatthevoteisnotbindingonKroger.TheCompensationCommitteeofthe
Boardisresponsibleforestablishingexecutivecompensation.InsodoingthatCommitteewillconsider,along
with all other relevant factors, the results of this vote.
Weaskourshareholderstovoteonthefollowingresolution:
“RESOLVED,thatthecompensationpaidtotheCompany’snamedexecutiveofficers,asdisclosedpursuant
to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation
tables,andtherelatednarrativediscussion,isherebyAPPROVED.”
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 .