Big Lots 2007 Annual Report Download - page 41

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• comparing the amount and form of executive compensation, including equity compensation, paid to our
executives against the compensation paid to similarly-situated executives at companies within the new
peer group;
• comparing the amount of compensation paid to our outside directors against the amounts paid to non-
employee directors at companies within the new peer group; and
• considering minimum share ownership requirements for executives and outside directors.
After several meetings with Watson Wyatt, we have created a new peer group that is limited to retailers that we
believe are more similarly situated to us. When considering the composition of the new peer group, the Committee
selected a group of companies that produce median and average financial measures similar to ours. Among the
financial measures considered were revenues, market capitalization, cash flows from operations, total assets, net
income, earnings per share growth, price-to-earnings ratio, and shareholder return. The following 16 companies
comprise the new peer group used to evaluate executive compensation for fiscal 2008:
99 Cents Only Stores Dick’s Sporting Goods Family Dollar Pier 1 Imports
Abercrombie & Fitch Dollar General Fred’s Radio Shack
Bed Bath & Beyond Dollar Tree Jo-Ann Stores Ross Stores
BJ’s Wholesale Club DSW Limited Brands Stein Mart
Based, in part, on a review of comparative compensation data from the new peer group and the recommendations
offered by Watson Wyatt, we made changes in the amount of salary awarded for fiscal 2008 and implemented
the new share ownership requirements discussed below. Comparative compensation data is not the sole factor
in determining executive compensation amounts, and the Committee continues to consider many other factors.
While no changes in our equity compensation practices have been made for fiscal 2008 (aside from the new share
ownership requirements), the Committee continues to evaluate Watson Wyatt’s recommendations related to equity
compensation. As a result, executive compensation for fiscal 2008 blends updated salary amounts with an approach
to bonus and equity compensation that is consistent with our recent past practices.
Committee and Board Activity in Fiscal 2008
At its meeting in March 2008, the Committee: (i) certified that a bonus was payable for fiscal 2007 under the
2006 Bonus Plan; (ii) reviewed the tally sheets and compensation history for all EMC members; (iii) reviewed an
internal pay equity analysis and comparative compensation data from our new peer group; and (iv) formulated
its recommendations to the other outside directors for fiscal 2008 executive compensation. The Committee also
reviewed drafts of this CD&A and the other compensation disclosures required by the SEC. At the subsequent
Board meeting, the Committee recommended, and the outside directors approved, the following fiscal 2008
salaries and equity awards for the named executive officers (with the bonus payout percentages remaining the same
as fiscal 2007 for Mr. Fishman, Mr. Waite and Mr. Martin, and being increased by approximately 17% over fiscal
2007 for Mr. Cooper and Ms Bachmann):
Name
Fiscal 2008
Salary
($)
Common Shares Underlying
Stock Option Award
(#)
Common Shares Underlying
Restricted Stock Award
(#)
Mr. Fishman 1,200,000 330,000 165,000
Mr. Cooper 440,000 48,750 16,250
Mr. Waite 550,000 37,500 12,500
Mr. Martin 520,000 37,500 12,500
Ms. Bachmann 440,000 48,750 16,250
New Minimum Share Ownership Requirements
Prior to March 2008, we had encouraged, but not required, any director or executive to own our common shares.
We have, however, had a holding period that requires all directors and EMC members to refrain from selling net
shares acquired upon any exercise of stock options accelerated in November 2005 until the date on which the
stock option would have vested under its original vesting terms or, if earlier, the recipient’s death, disability or
termination of service.