Big Lots 2009 Annual Report Download - page 44

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groups vary from year to year based on the Committee’s assessment of which companies we believe compete with
us for talent and are similar to us in terms of operations or revenues and the continued availability of compensation
information from companies previously included in either peer group. For a list of the companies included in the
peer groups, refer to Appendix A of this Proxy Statement.
The Committee and our human resources department reviewed each EMC member’s responsibilities and
compared, where possible, the compensation of each executive to the compensation awarded to similarly-situated
executives at peer group companies. The Committee compared the total direct compensation levels for our EMC
members to the total direct compensation of similarly situated executives within the peer groups. For purposes of
this evaluation, no specific weight was given to one peer group over the other and total direct compensation was
comprised of salary, bonus at the targeted level and equity awards.
While we often award total direct compensation in the range of the fiftieth to seventy-fifth percentile of total direct
compensation paid by the peer groups, this range merely provides a point of reference and market check and is not
a determinative factor for setting our executives’ compensation and, as discussed in this CD&A, compensation
is subjectively determined based on numerous factors. We believe this approach to the use of compensation data
enables us to retain the flexibility necessary to make adjustments for performance and experience, to attract,
retain and motivate top talent, and to reward executives who we believe excel or take on greater responsibility than
executives at peer group companies.
Tally Sheets and Wealth Accumulation
The Committee reviewed tally sheets that set forth the total and each element of compensation awarded to each
EMC member for the immediately preceding two fiscal years, as well as estimated post-employment and change
in control compensation that may be payable to such executives. The purpose of the tally sheets is to consolidate
all elements of actual and projected compensation for our executives, so the Committee may analyze the individual
elements of compensation, the mix of compensation and the total amount of actual and projected compensation.
With this information, the Committee determined that the compensation awarded to our executives is reasonable
and consistent with our executive compensation philosophy and objectives.
These tally sheets also included an estimate of the amount of total value accumulated, and total value that will
be accumulated, by each EMC member through prior equity awards (assuming employment continues, awards
vest and the market price of our common shares fluctuates through the life of the awards). While the Committee
considered the accumulated total value as a factor in setting fiscal 2009 compensation, this information was not
a primary consideration. The Committee believes that its objectives of motivating executives to achieve short-
term and long-term goals, rewarding executives for achieving those goals and providing incentives for executives
to continue their employment with us would not be adequately served if the accumulated total value of an EMC
member’s equity awards was a determinative factor in awarding future compensation.
Internal Pay Equity
In the process of reviewing each element of executive compensation separately and in the aggregate, the
Committee considered information comparing the relative compensation of our CEO to the other EMC members.
This information was considered to ensure that our executive compensation program is internally equitable, which
we believe promotes executive retention and motivation. The comparison included all elements of compensation.
The relative difference between the compensation of our CEO and the compensation of our other named executive
officers did not change significantly in fiscal 2009, and it has not changed significantly since hiring Mr. Fishman
in 2005. The Committee believes that the disparity between Mr. Fishman’s compensation and the compensation for
the other EMC members is appropriate in light of his responsibilities and remains necessary to retain and motivate
a chief executive with Mr. Fishman’s experience.