Big Lots 2012 Annual Report Download - page 44

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Salary for Fiscal 2012
The salaries paid to our named executive officers for fiscal 2012 are shown in the “Salary” column of the Summary
Compensation Table. The Committee and the other outside directors believed that our increased earnings per
share, continued focus on store growth in the United States and expansion into Canada was a direct result of our
named executive officers’ individual performances, as discussed in the “Performance Evaluation” section of this
CD&A. The Committee and other outside directors evaluated Mr. Fishman’s fiscal 2011 salary and agreed it was
competitive when compared to other salaries of the CEOs of the companies in our peer group and agreed to keep
Mr. Fishman’s salary at the same level in fiscal 2012. The Committee and the other outside directors also approved
the following fiscal 2012 salaries for our other named executive officers: Mr. Johnson: $310,000; Mr. Martin:
$590,000; Ms. Bachmann: $565,000; Mr. Cooper: $565,000; Mr. Haubiel: $465,000; and Mr. Wurl: $525,000.
These annualized salaries became effective on March 25, 2012. On August 23, 2012, Mr. Johnson was promoted to
Senior Vice President, Chief Financial Officer; Ms. Bachmann was promoted to Executive Vice President, Chief
Operating Officer; and Mr. Haubiel was promoted to Executive Vice President, Chief Administrative Officer and
Corporate Secretary. In connection with their promotions and to reflect the increased responsibilities of their new
positions, Mr. Johnson’s salary was increased to $400,000; Ms. Bachmann’s salary was increased to $595,000; and
Mr. Haubiel’s salary was increased to $500,000.
Bonus for Fiscal 2012
As previously discussed, we did not pay any bonuses to our named executive officers under the 2006 Bonus
Plan for fiscal 2012, as reflected in the “Non-Equity Incentive Plan Compensation” column of the Summary
Compensation Table. During their annual review of executive compensation in March 2012, the Committee and
other outside directors approved the financial measure, corporate performance amounts and payout percentages
(threshold, target and stretch) for the fiscal 2012 bonuses.
The Committee and the other outside directors selected operating profit as the financial measure for the fiscal 2012
bonuses because they believe it is a strong indicator of our profitability, ongoing operating results and financial
condition. The Committee and other outside directors selected the corporate performance amounts based on the
annual corporate operating plan set by the Board. The corporate performance amounts were set slightly below (for
the threshold bonus), at (for the target bonus), and above (for the stretch bonus) the projected operating profit in our
annual corporate operating plan. The Committee and other outside directors believe the selected amounts provided
challenging, but reasonable, levels of performance that were appropriate in light of our projected corporate
operating plan for fiscal 2012, and our objective to promote sustained profitability while providing objectives
that motivate our executives. Because the Committee and the other outside directors consider the specific
circumstances that we expect to face in the coming fiscal year (e.g., year-over-year comparable performance,
general economic factors and performance of the retail sector), the relationship between each of the corporate
performance amounts and between the corporate performance amounts and our annual corporate operating plan
may vary significantly from year to year.
The payout percentages for our named executive officers for fiscal 2012 were made at the discretion of the
Committee and the other outside directors, subject to the minimum payout percentages established in the named
executive officers’ employment agreements. The Committee and other outside directors elected to maintain the
bonus payout percentages for our named executive officers for fiscal 2012 at the same levels as in fiscal 2011. This
decision was primarily driven by the belief that those bonus payout percentages were appropriate for fiscal 2012 to
accomplish our executive compensation objectives.
In order to calculate bonuses under the 2006 Bonus Plan, we first calculate the financial measure for purposes of
our financial statements. We then adjust the measure for purposes of the bonus calculation to remove the effect
of events, transactions or accrual items set forth in the 2006 Bonus Plan and approved by the Committee early in
each fiscal year when the corporate performance amount and bonus payout percentages are established. These
adjustments may have the net effect of increasing or decreasing the resulting corporate performance amount.
Additionally, the Committee may exercise negative discretion to cancel or decrease the bonuses earned (but not
increase a bonus for a covered employee, as that term is used within Section 162(m) of the IRC). Accordingly,
the resulting corporate performance amount may differ from the financial measure (i.e., operating profit) amount
reflected in the financial statements included with our Form 10-K.