Kroger 2015 Annual Report Download - page 24

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22
Summary of Key Compensation Practices
What we do: What we do not do:
9 Align pay and performance
9 Significant share ownership guidelines of 5x
salary for our CEO
9 Multiple performance metrics under our
short- and long-term performance-based plans
discourage excessive risk taking
9 Balance between short-term and long-term
compensation discourages short-term risk
taking at the expense of long-term results
9 Engagement of an independent compensation
consultant
9 Robust clawback policy
9 Ban on hedging and pledging of Kroger
securities
9 Limited perquisites
8 No employment contracts with executives
8 No special severance or change of control
programs applicable only to executive officers
8 No gross-up payments were made to executives
under Kroger plans
8 No re-pricing or backdating of options
8 No guaranteed salary increases or bonuses
8 No payment of dividends or dividend equivalents
until performance units are earned
8 No single-trigger cash severance benefits upon
a change in control
Summary of Fixed and At-Risk Pay Elements
The fixed and at-risk pay elements of NEO compensation are reflected in the following table and
charts. The amounts used in the charts are based on the amounts reported in the Summary Compensation
Table for 2015, excluding the Change in Pension Value and Nonqualified Deferred Compensation
Earnings column.
Fixed At-Risk
Annual Long-Term
Pay
Element
Base Salary All Other
Compensation
Annual Cash
Bonus
Long-Term
Cash Bonus and
Performance Units
(the “Long-Term
Incentive Plan”)
Restricted Stock
and Stock Options
(time-based
equity awards)
Description • Fixed cash
compensation
• Reviewed
annually
• No automatic
or guaranteed
increases
• Insurance
premiums
paid by the
Company
• Dividends paid
on unvested
restricted stock
• Matching and
automatic
contributions
to defined
contribution
benefit plans
• Variable cash
compensation
• Payout
depends
on actual
performance
against
annually
established
goals
• Variable
compensation
payable as long-
term cash bonus
and performance
units
• 3-year
performance
period
• Payout depends
on actual
performance
against
established
goals
• Stock options
vest over 5 years
• Exercise price of
stock options is
closing price on
day of grant
• Restricted stock
vests over 3 or
5 years