Big Lots 2010 Annual Report Download - page 39

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- 23 -
of each other EMC member. At our Committee and Board meetings in the first quarter of the fiscal year for which
compensation is being set (e.g., in March 2010 for fiscal 2010 compensation), our CEO provides the Committee
and the other outside directors with a thorough performance evaluation of each other EMC member and presents
his recommendations for their compensation. The Committee also conducts executive sessions to evaluate our
CEO’s performance, with the most detailed evaluation including all outside directors during our first quarter Board
meeting. See the “Performance Evaluation” section of this CD&A for a discussion of the factors considered by our
CEO, the Committee and the other outside directors when evaluating performance.
At its March 2010 meeting, the Committee:
• reviewed and discussed the continued appropriateness of our executive compensation program,
including its underlying philosophy, objectives and policies;
• reviewed and discussed our CEO’s performance, contributions and value to our business;
• reviewed and discussed our CEO’s performance evaluations and compensation recommendations for the
other EMC members;
• reviewed and discussed the comparative compensation data that it received through surveys conducted
by independent compensation consultants and analyzed by management;
• analyzed the total compensation earned by each EMC member during the immediately preceding two
fiscal years;
• analyzed the potential payments to each EMC member upon termination of employment and change in
control events;
• considered the parameters on executive compensation awards established by the terms of the
shareholder-approved plans under which bonus and equity compensation may be awarded and the
employment agreements between us and each EMC member;
• prepared its recommendation on the compensation of each EMC member for fiscal 2010;
• determined that a bonus was payable under the 2006 Bonus Plan as a result of corporate performance in
fiscal 2009; and
• determined that the second trigger for the fiscal 2008 restricted stock awards and the first and second
triggers for the fiscal 2009 restricted stock awards were achieved as a result of corporate performance
in fiscal 2009.
The Committee then shared its recommendations on the EMC members’ compensation, including the underlying
data and analysis, with the other outside directors for their consideration and approval. The Committee’s
recommendations were, with respect to the EMC members other than the CEO, consistent with the CEO’s
recommendations. At the March 2010 Board meeting, the outside directors discussed with the Committee
the form, amount of, and rationale for the recommended compensation and, consistent with the Committee’s
recommendations, finalized the compensation awards for the EMC members.
Except where we discuss the specifics of a named executive officer’s fiscal 2010 compensation, the evaluation and
establishment of our named executive officers’ fiscal 2010 compensation was substantially similar. Based on their
review of each element of executive compensation separately, and in the aggregate, the Committee and the other
outside directors determined that our named executive officers’ compensation for fiscal 2010 was reasonable and
not excessive and was consistent with our executive compensation philosophy and objectives.
Salary for Fiscal 2010
The salaries paid to our named executive officers for fiscal 2010 are shown in the “Salary” column of the Summary
Compensation Table. During its annual review of executive compensation in March 2010, the Committee considered
our fiscal 2009 performance during a very difficult environment nationwide for retailers and the prior decision to
freeze our named executive officers’ salaries for fiscal 2009. Additionally, when evaluating the salaries of Mr. Cooper,
Ms. Bachmann and Mr. Haubiel, the Committee considered their promotion to Executive Vice President in March
2010 and the additional responsibilities assumed by each of them in fiscal 2010. The Committee and the other outside
directors believed that our outstanding performance and growth in fiscal 2009 was a direct result of our named