Big Lots 2010 Annual Report Download - page 63

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our common shares. We believe that awarding a significant percentage of the total compensation of our
named executive officers as “at-risk incentive compensation” (84.5% in fiscal 2010) exemplifies the
emphasis of our executive compensation program on “pay for performance” and demonstrates that our
executive compensation program is closely aligned with the interests of our shareholders.
• Manage executive compensation costs. We compare the compensation paid to our executives with the
compensation paid to similarly-situated executives at companies within our peer groups, which provides
a market check on the compensation we pay to our executives and supports our belief that we do not
overpay our executives and we effectively manage our executive compensation costs.
• Focus on corporate governance. We seek the approval of the five additional outside directors who do
not serve on the Compensation Committee before finalizing annual executive compensation to provide
an additional check on the appropriateness of the amounts awarded.
For a more detailed discussion of how our executive compensation program reflects these objectives and our
executive compensation philosophy, including information about the 2010 compensation of our named executive
officers, please review the CD&A in this Proxy Statement.
We request that our shareholders indicate their support for the compensation of our named executive officers as
disclosed in this Proxy Statement pursuant to Item 402 of Regulation S-K by approving the following resolution:
“RESOLVED, that the shareholders of Big Lots approve, on an advisory basis, the compensation
of the named executive officers of Big Lots, as disclosed in Big Lots’ Proxy Statement for the 2011
Annual Meeting of Shareholders pursuant to Item 402 of Regulation S-K, including the Compensation
Discussion and Analysis, compensation tables and accompanying narrative discussion.”
The vote on the approval of the compensation of our named executive officers is advisory, which means that the
vote is not binding on the Board, the Compensation Committee or us. If a majority of the votes are cast against
the approval of the compensation of our named executive officers, the Board and the Compensation Committee
will evaluate whether to take any actions to address the concerns of the shareholders with respect to our executive
compensation program.
THE BOARD RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF THE COMPENSATION
OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT
PURSUANT TO ITEM 402 OF REGULATION S-K, INCLUDING THE CD&A, COMPENSATION
TABLES AND NARRATIVE DISCUSSION.
PROPOSAL THREE: VOTE, ON AN ADVISORY BASIS, ON THE FREQUENCY OF THE SAY ON PAY VOTE
As described in Proposal Two, we are providing our shareholders the opportunity to cast an advisory vote on
the compensation of our named executive officers. Proposal Three affords shareholders the opportunity to cast
a nonbinding advisory vote on how frequently we should include the say on pay vote in our proxy materials for
future annual shareholder meetings. Under Proposal Three, our shareholders may vote to conduct the say on pay
vote every year, every two years or every three years. Our shareholders may also abstain from casting a vote on
this Proposal Three.
The Board has determined that an advisory say on pay vote that occurs once every three years is the most
appropriate alternative for us and, therefore, the Board recommends that our shareholders vote to hold the say
on pay vote once every three years. In determining its recommendation, the Board concluded that holding an
advisory say on pay vote once every three years will provide our shareholders with sufficient time to evaluate
the effectiveness of our overall compensation philosophy, policies and practices in the context of our long-term
business results for the corresponding period, while discouraging an over-emphasis on short-term variations in
compensation and business results. A say on pay vote that occurs once every three years will also permit our
shareholders to observe and evaluate the impact of any changes to our executive compensation policies and
practices implemented since the last say on pay vote, including changes made in response to the outcome of a
prior say on pay vote. Because the say on pay vote will occur after we have already implemented our executive
compensation programs for the current year, we expect that it may not be appropriate or feasible to fully address
and respond to any one year’s say on pay vote by the time of the following year’s annual meeting of shareholders.