Big Lots 2009 Annual Report Download - page 33

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• Salary
Salary is cash compensation and is established annually for each named executive officer. A minimum
salary for each named executive officer is set forth in his or her respective employment agreement, as
described below. Salary adjustments are subjectively determined and are not formally tied to specific
performance criteria. The Committee has not adopted any specific schedule of salary increases and
makes adjustments to the named executive officers’ respective salaries without regard to adjustments in
the salaries of other executives.
• Bonus
Each named executive officer has the opportunity to earn an annual cash bonus under the 2006 Bonus
Plan. Bonus payouts correspond to a percentage of each named executive officer’s salary (“payout
percentage”) and are based on whether we achieve certain corporate performance amounts under one or
more financial measures. The corporate performance amounts and financial measures are set annually
at the discretion of the Committee and the other outside directors in connection with the Board’s
approval of our annual corporate operating plan, subject to the terms of the 2006 Bonus Plan and the
named executive officers’ employment agreements.
The lowest level at which we will pay a bonus under the 2006 Bonus Plan is referred to as the “floor.”
A bonus is not paid under the 2006 Bonus Plan if we do not achieve at least the corporate performance
amount that earns a floor bonus. The level at which we generally plan our performance and the
associated payout under the 2006 Bonus Plan is referred to as the “target.” The maximum level at which
we will pay a bonus under the 2006 Bonus Plan is referred to as the “stretch.” If our performance in
a fiscal year exceeds the minimum corporate performance amount that earns a floor bonus, there is
a corresponding increase in the amount of the bonus (up to a maximum at the stretch bonus level).
Bonuses paid to the named executive officers under the 2006 Bonus Plan are considered “Non-Equity
Incentive Plan Compensation” in the Summary Compensation Table. See the “Bonus and Equity Plans”
disclosure that follows the Summary Compensation Table and Proposal Three for more information
concerning the 2006 Bonus Plan.
• Equity
All equity awards granted to the named executive officers since January 1, 2006 have been issued under
the 2005 Incentive Plan. Although the 2005 Incentive Plan allows us to issue various types of equity
awards, we have granted only stock options and restricted stock under the 2005 Incentive Plan. The
stock options vest based on the passage of time or, if earlier, upon the executive’s death or disability
(provided such event occurs at least six months after the grant date). The restricted stock vests based
on the achievement of the first trigger and then the achievement of the second trigger, the passage of
time, or the executive’s death or disability. See the “Bonus and Equity Plans” disclosure that follows the
Summary Compensation Table and Proposal Two for more information concerning the 2005 Incentive
Plan and the terms under which we have granted equity awards.
• Personal Benefits/Perquisites
The following are the personal benefits and perquisites that are generally provided only to employees
at or above the vice president level: (i) coverage under the Big Lots Executive Benefit Plan (“Executive
Benefit Plan”); (ii) enhanced long-term disability insurance coverage; and (iii) use of an automobile or
payment of an automobile allowance. Mr. Fishman is also permitted to make limited non-business use
of corporate aircraft. We believe that these personal benefits and perquisites, although immaterial to us
in amount, are an important element of total compensation provided to our executives because of the
value our executives place on these benefits and the convenience of having these benefits when faced
with the demands of their positions. The Committee evaluates and determines the personal benefits
and perquisites received by named executive officers during its annual review of the named executive
officers’ total compensation.
We offer all full-time employees medical and dental benefits under the Big Lots Associate Benefit Plan
(“Benefit Plan”). We also offer employees at or above the vice president level, including the named
executive officers, the opportunity to participate in the Executive Benefit Plan, which reimburses