Kroger 2015 Annual Report Download - page 27
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25
Components of Executive Compensation at Kroger
Compensation for our NEOs is comprised of the following:
• Annual Compensation:
¾ Salary
¾ Performance-Based Annual Cash Bonus
• Long-Term Compensation:
¾ Performance-Based Long-Term Incentive Plan (consisting of a long-term cash bonus and
performance units)
¾ Non-qualified stock options
¾ Restricted stock
• Retirement and other benefits
• Limited perquisites
The annual and long-term performance-based compensation awards described herein were made
pursuant to our 2011 Long-Term Incentive and Cash Bonus Plan and our 2014 Long-Term Incentive and
Cash Bonus Plan, each of which was approved by our shareholders in 2011 and 2014, respectively.
Annual Compensation – Salary
Our philosophy with respect to salary is to provide a sufficient and stable source of fixed cash
compensation. All of our compensation cannot be at-risk or long-term. It is important to provide a
meaningful annual salary to attract and retain a high caliber leadership team, and to have an appropriate
level of cash compensation that is not variable.
Salaries for the NEOs (with the exception of the CEO) are established each year by the
Compensation Committee, in consultation with the CEO. The CEO’s salary is established by the
independent directors. Salaries for the NEOs are reviewed annually in June.
The amount of each NEO’s salary is influenced by numerous factors including:
• An assessment of individual contribution in the judgment of the CEO and the Compensation
Committee (or, in the case of the CEO, of the Compensation Committee and the rest of the
independent directors);
• Benchmarking with comparable positions at peer group companies;
• Tenure in role; and
• Relationship to other Kroger executives’ salaries.
The assessment of individual contribution is a qualitative determination, based on the following
factors:
• Leadership;
• Contribution to the officer group;
• Achievement of established objectives, to the extent applicable;
• Decision-making abilities;
• Performance of the areas or groups directly reporting to the officer;
• Increased responsibilities;
• Strategic thinking; and
• Furtherance of Kroger’s core values.