Big Lots 2013 Annual Report Download - page 57

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of the Savings Plan and Supplemental Savings Plan. Participation in the Pension Plan and Supplemental Pension
Plan, which we do not believe are material elements of our executive compensation program, is limited to certain
employees whose hire date precedes April 1, 1994. Our named executive officers have not been in the past and are
not now eligible to participate in the Pension Plan or Supplemental Pension Plan.
Our Executive Compensation Program for Fiscal 2013
The Committee takes the lead in establishing executive compensation annually, but seeks approval of
compensation decisions from the other outside directors. The Committee believes having all outside directors
approve executive compensation is consistent with best practices in corporate governance. The Committee also
requests performance evaluations and recommendations from our CEO regarding the compensation of the other
Leadership Team members because of his direct knowledge of their respective performance and contributions.
Additionally, as discussed in more detail below in the “Role of Management” and “Independent Compensation
Consultant” sections of this CD&A, the Committee consults with management and may engage independent
compensation consultants to take advantage of their expertise.
The process of evaluating our executives begins at our Board meeting in the second quarter of the fiscal year
before the fiscal year in which compensation adjustments will be made (e.g., in May 2012 for adjustments made in
fiscal 2013) and continues quarterly through updates that our CEO delivers to the outside directors to keep them
apprised of the performance of each other Executive Officer. At our Committee and Board meetings in the first
quarter of the fiscal year for which compensation is being set (e.g., in February 2013 for fiscal 2013 compensation),
our CEO provides the Committee and the other outside directors with a thorough performance evaluation of
each other Executive Officer and presents his recommendations for their compensation. The Committee also
conducts executive sessions to evaluate our CEO’s performance, with the most detailed evaluation including
all outside directors during our first quarter Board meeting. See the “Performance Evaluation” section of this
CD&A for a discussion of the factors considered by our CEO, the Committee and the other outside directors when
evaluating performance.
At its February 2013 meeting, the Committee:
• reviewed and discussed the continued appropriateness of our executive compensation program,
including its underlying philosophy, objectives and policies;
• reviewed and discussed Mr. Fishman’s performance, contributions and value to our business;
• reviewed and discussed Mr. Fishman’s performance evaluations and compensation recommendations
for the other Leadership Team members;
• reviewed and discussed the comparative compensation data that it received through surveys conducted
by independent compensation consultants and analyzed by management;
• analyzed the total compensation earned by each Executive Officer during the immediately preceding
two fiscal years;
• analyzed the potential payments to each Executive Officer upon termination of employment and change
in control events;
• considered the parameters on executive compensation awards established by the terms of the
shareholder-approved plans under which bonus and equity compensation may be awarded and the
employment agreements between us and certain Leadership Team members;
• prepared its recommendation on the compensation of each Leadership Team member for fiscal 2013;
• determined that a bonus was not payable under the 2006 Bonus Plan as a result of corporate
performance in fiscal 2012;
• determined that Mr. Fishman’s fiscal 2012 restricted stock award would not vest because the required
corporate performance level was not achieved; and
• determined, for the other named executive officers that the second triggers for their fiscal 2011
and fiscal 2012 time-vested restricted stock awards were not achieved and the first trigger for their
fiscal 2012 time-vested restricted stock awards was achieved as a result of corporate performance in
fiscal 2012.