Big Lots 2012 Annual Report Download - page 72

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- 58 -
lower than the total potential compensation awarded to our named executive officers for fiscal 2012.
For example, we did not achieve the operating profit required for our named executive officers to earn
bonuses for fiscal 2012 under the 2006 Bonus Plan. Accordingly, the named executive officers did not
receive bonuses for fiscal 2012.
x Align the interests of executives and shareholders through incentive-based executive compensation.
The realization and value of bonus opportunities under the 2006 Bonus Plan and equity awarded under
the 2005 LTIP and 2012 LTIP are dependent upon our performance and/or the appreciation in the value
of our common shares. We believe that awarding a significant percentage of the total compensation of
our named executive officers as at-risk incentive compensation (84.7% in fiscal 2012) 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. In some years,
as was the case in fiscal 2012, our named executive officers may not realize a significant portion of the
at-risk incentive compensation awarded to them, as our named executive officers did not receive a bonus
in fiscal 2012. Additionally, we did not achieve the operating profit goal established at the beginning of
fiscal 2012 necessary for Mr. Fishman’s fiscal 2012 performance-based restricted stock award to vest.
As a result, Mr. Fishman’s fiscal 2012 performance-based equity award did not vest and was therefore
forfeited. We believe this shows that our pay practices are designed to effectively incentivize our
executives to dedicate themselves fully to creating value for our shareholders.
x 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.
x 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 2012 compensation of our named executive
officers, we encourage you to read the CD&A as well as the Summary Compensation Table and other related
compensation tables 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 2013
Annual Meeting of Shareholders pursuant to Item 402 of Regulation S-K, including the Compensation
Discussion and Analysis, compensation tables and the narrative discussion accompanying the tables.”
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 THE NARRATIVE DISCUSSION ACCOMPANYING THE TABLES.