Big Lots 2009 Annual Report Download - page 43

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(ii) Successful implementation of enhancements and upgrades to current information technology
infrastructure supporting our business needs, including enhancements to our point-of-sale
system in connection with the launch of our customer rewards program and upgrades to our
allocation system in connection with our initiative to increase inventory turnover; and
(iii) Continued the multi-year implementation of the SAP for Retail information technology system
that will replace our core merchandising and financial systems, including the successful
implementation of SAP Financials.
See the “Comparative Compensation Data” section of this CD&A for more information regarding the impact that
the competitive market has on our executive compensation program.
Role of Management
As discussed in this CD&A, our CEO plays a significant role in determining executive compensation. Additionally,
our CEO and the Committee consult with management from our human resources, finance and legal departments
regarding the design and administration of our compensation programs, plans and awards for executives and
directors. These members of management provide the Committee and CEO with advice regarding the competitive
nature of existing and proposed compensation programs and the impact of accounting rules, laws and regulations
on existing and proposed compensation programs. Management from our human resources, finance and legal
departments may also act pursuant to delegated authority to fulfill various functions in administering our employee
benefit and compensation plans. Such delegation is permitted by the Committee’s charter and the compensation
plans. Those groups to whom the Committee has delegated certain responsibilities are each required to periodically
report their activities to the Committee.
Our CEO and some of these members of management attend general meetings of the Committee, and the CEO
participates in the Committee’s discussions regarding the compensation of the other EMC members. However,
these individuals do not participate in executive sessions of the Committee or when executive compensation
determinations are made by the Committee and the other outside directors.
Independent Compensation Consultant
Pursuant to the authority granted to the Committee by its charter, the Committee may retain independent
compensation consultants as it deems necessary. In establishing executive compensation for fiscal 2009, the
Committee did not retain an independent compensation consultant, but did reference (as discussed below) non-
customized compensation surveys provided by multiple independent compensation consultants at the request of our
human resources department.
Comparative Compensation Data
The Committee uses data regarding the compensation paid to executives at other companies. For fiscal 2009, the
Committee evaluated a group of retailers that we believe is similarly situated to us and with whom we compete for
talent. When considering the composition of the retailer-only peer group, the Committee selected retail companies
that have median and average financial measures similar to ours. Among the financial measures considered were
revenues, market capitalization, net income, earnings per share, price-to-earnings ratio and shareholder return.
Our human resources department provided the Committee with comparative executive compensation data it
obtained from the proxy statements and other reports made public by the companies in the retailer-only peer
group. Additionally, the Committee reviewed executive compensation data from a broader base of companies
that was aggregated in one or more of the non-customized compensation surveys obtained from Mercer Human
Resource Consulting, Towers Perrin, Hewitt Associates and Hay Group. This broader peer group was comprised
of Standard & Poor’s Retail Stores Index companies and other companies, including non-retailers, with whom
we believe we also compete for talent and whose revenues or operations are similar to ours. We believed it was
prudent to consult both sets of information, because the compensation surveys for the broader group include
compensation information on more executives, including executives who are not included in publicly-available
documents. The broader peer group also provides a more extensive basis on which to compare the compensation of
the EMC members, particularly EMC members whose responsibilities, experience and other factors are not directly
comparable to those executives included in the publicly-available reports of the retailer-only group. These peer