Big Lots 2013 Annual Report Download - page 59

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(e.g., year-over-year comparable performance, general economic factors and performance of the retail sector), the
relationship between each of the corporate performance goals and between the corporate performance goals and
our annual corporate operating plan may vary significantly from year to year.
The payout percentages for our named executive officers for fiscal 2013 were made at the discretion of the
Committee and other outside directors, subject to the minimum payout percentages established in the named
executive officers’ employment agreements for those named executive officers with an employment agreement.
The Committee and other outside directors elected to maintain the annual incentive award payout percentages for
our named executive officers for fiscal 2013 at the same levels as in fiscal 2012. This decision was primarily driven
by the belief that those annual incentive award payout percentages were appropriate for fiscal 2013 to accomplish
our executive compensation objectives.
In order to calculate annual incentive awards 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 annual incentive award
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 annual incentive
award 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 annual incentive awards earned (but not increase an annual incentive award 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.
After calculating the financial measure and making the adjustments described in the preceding paragraph, the
Committee exercised negative discretion to reduce the resulting fiscal 2013 corporate performance amount (to
the amount reflected in the table below) to exclude certain accrual items that, under the 2006 Bonus Plan and
the Committee’s approval in March 2013, would have otherwise increased the corporate performance amount.
The Committee opted to make the downward adjustment by excluding the accrual items principally because they
were anticipated as part of the annual corporate operating plan upon which the financial measure and corporate
performance amounts were established for fiscal 2013, and the Committee did not believe that the accrual items
should have the effect of increasing the corporate performance amount for fiscal 2013 annual incentive awards. The
Committee’s decision to exercise negative discretion was not based on corporate or individual performance factors.
The following table reflects the payout percentage for each annual incentive award level and the corporate
performance amount required to achieve the corresponding annual incentive award level, with the results for fiscal
2013, calculated as described above (including the Committee’s discretionary reduction discussed in the preceding
paragraph), noted:
Annual Incentive
Award Level
and
2013 Results
Payout Percentage
(% of salary) Corporate Performance
Amount
($)
Mr.
Campisi
Mr.
Johnson
Ms.
Bachmann
Mr.
Cooper
Mr.
Rodriguez
Mr.
Fishman
Mr.
Haubiel
Mr.
Martin
No Bonus 0 0 0 0 0 0 0 0 0-$299,107,999
Threshold 50 25 30 30 25 60 30 30 $299,108,000
Target 100 50 60 60 50 120 60 60 $314,828,000
Maximum 200 100 120 120 100 240 120 120 $357,098,000
2013 Results 0 0 0 0 0 0 0 0 $216,030,568
Our named executive officers did not earn an annual incentive award for fiscal 2013 under our 2006 Bonus
Plan, because our fiscal 2013 performance was lower than the corporate performance amount established for the
threshold annual incentive award level. The primary objectives in setting the corporate performance amounts for
fiscal 2013 were to reward 2006 Bonus Plan participants while encouraging strong corporate earnings growth. As
a result of not making fiscal 2013 annual incentive award payments, total cash compensation paid to our named
executive officers for fiscal 2013 was generally at or below the median for our comparator groups. We believe
lower than market average total cash compensation is appropriate in light of our fiscal 2013 performance and
furthers our objectives to motivate our executives, reward superior performance and align pay and performance.