Big Lots 2012 Annual Report Download - page 50

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- 36 -
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 our 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 2012, the
Committee retained independent compensation consultant Towers Watson to provide retailer-only peer group
compensation surveys and financial information from those companies’ public filings. Additionally, Towers
Watson provided broader compensation survey data from not only their own compensation surveys, but also from
Mercer. The Committee also reviewed (as discussed below) non-customized compensation surveys provided by
multiple independent compensation consultants at the request of our human resources department. In addition, the
Committee engaged Exequity to assist with the development of the 2012 LTIP and the associated disclosures for
our 2012 proxy statement.
Comparative Compensation Data
The Committee uses data regarding the compensation paid to executives at other companies in its annual review
of the compensation paid to EMC members. For fiscal 2012, 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. The companies included in the retailer-only peer
group for fiscal 2012 were:
Abercrombie & Fitch Dollar Tree PetSmart
Advanced Auto Parts DSW PriceSmart
Bed Bath & Beyond Family Dollar Ross Stores
Collective Brands Foot Locker Tractor Supply
Dick’s Sporting Goods Limited Brands Williams – Sonoma
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 and TowersWatson.
This broader peer group consisted of more than 2,000 participating companies, including 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 groups vary from year to year
based on the Committee’s assessment of which companies it believes 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.