Big Lots 2012 Annual Report Download - page 52

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Title Multiple of Retainer or Salary
Director 4x
Chief Executive Officer 4x
Executive Vice President 2x
Senior Vice President 1x
Shares counted toward these requirements include common shares held directly or through a broker, common
shares held under the Savings Plan or Supplemental Savings Plan, unvested restricted stock, and vested but
unexercised in-the-money stock options. Each outside director that served on the Board when these requirements
were adopted in March 2008 must meet the requirements on the date of the 2013 annual meeting of shareholders
and at subsequent annual meetings. Each EMC member that was an EMC member when these requirements were
adopted must meet the requirements on the date that adjustments to annual executive compensation are made
in 2013 and on subsequent annual adjustment dates. Directors elected and executives hired or promoted after
the adoption of the requirements must meet the requirements on the first testing date for directors or executives
following the fifth anniversary of their election, hire or promotion, as applicable. As of March 13, 2013, each
of our outside directors (except for Mr. Chambers, who is not required to meet the requirement until our 2017
annual meeting of shareholders) and each EMC member would have complied with our minimum share ownership
requirements. In addition to the minimum share ownership requirements, we do not allow our directors or named
executive officers to enter into any hedging or monetization transactions of our common shares.
Equity Grant Timing
Pursuant to the terms of the 2005 LTIP and 2012 LTIP, the grant date of equity awards must be the later of the date
the terms of the award are established by corporate action or the date specified in the award agreement. Consistent
with prior years, in fiscal 2012, the outside directors, after consultation with the Committee, specified that the
grant date of the equity awards made in connection with the annual performance reviews of the EMC members
was the second trading day following our release of fiscal 2011 results. This future date was established to allow
the market to absorb and react to our release of material non-public information, and to avoid any suggestion that
the Board, the Committee or any employee manipulated the terms of the equity awards. For equity awards made
throughout the fiscal year, which generally are made as a result of a hiring or promotion, the grant date is the date
of the related event (i.e., the first day of employment or effective date of promotion). We have no policy of timing
the grant date of these mid-year equity awards with the release of material non-public information, and we have not
timed the release of material non-public information for the purpose of affecting the value of any equity awards.
Tax and Accounting Considerations
The Committee reviews and considers the impact that tax laws and accounting regulations may have on the
executive compensation awards, including the deductibility of executive compensation under Section 162(m). In
doing so, the Committee relies on guidance from members of our finance and legal departments, as well as outside
accountants and attorneys.
Section 162(m) generally limits the tax deductions for compensation expense in excess of $1 million paid to our
CEO and our three other highest compensated executives (excluding the principal financial officer). Compensation
in excess of $1 million may be deducted if it is “qualified performance-based compensation” within the meaning
of Section 162(m). Except as discussed below, we believe that compensation paid under our equity and bonus
compensation plans is fully deductible for federal income tax purposes. However, in certain situations, the
Committee may approve compensation that will not meet these requirements in order to ensure competitive levels
of total compensation for our executives or to otherwise further our executive compensation philosophy and
objectives. When considering whether to award compensation that will not be deductible, the Committee compares
the cost of the lost deduction against the competitive market for executive talent and our need to attract, retain and
motivate the executive, as applicable.
For fiscal 2012, the Committee believes it has taken the necessary actions to preserve the deductibility of
all payments made under our executive compensation program, with the exception of a portion of the base
compensation paid to Mr. Fishman. If the IRC or the related regulations change, the Committee intends to take