Big Lots 2013 Annual Report Download - page 89

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• In 2013, shareholders not only overwhelmingly rejected management’s SOP proposal, but
also withheld the majority of votes cast from director Russell Solt, chair of the compensation
committee; the board subsequently rejected Mr. Holt’s resignation.
• The average tenure of Big Lot’s eight non-executive directors will reach 11 years in 2014.
We urge shareholders to vote FOR this proposal.
BOARD OF DIRECTORS’ STATEMENT IN OPPOSITION TO SHAREHOLDER PROPOSAL
The Board recommends that shareholders vote AGAINST this “proxy access” proposal because it believes that
(1) proxy access interferes with effective corporate governance and has adverse consequences, (2) our corporate
governance structure and applicable laws already provide the means for significant shareholder input, (3) our
implementation of numerous corporate governance and executive compensation measures demonstrates our
responsiveness to shareholders and provides several mechanisms that protect shareholder rights and (4) we
regularly engage in dialogue with our shareholders and are committed to ensuring their views are represented in
the boardroom.
Proxy access is a flawed procedure designed to facilitate company-financed proxy contests in director elections,
pitting the Board’s nominees against one or more shareholder-nominated candidates who may represent narrowly-
focused special interests rather than the interests of all of the company’s shareholders. For the reasons set forth
below, we believe proxy access is unnecessary, would adversely affect Big Lots and is not in the best interests of
our shareholders.
Proxy Access Interferes with Effective Corporate Governance
The Board believes that proxy access interferes with effective corporate governance and has the following
adverse consequences:
Promotes the Influence of Special Interests. The proponents desire to allow a shareholder (such as a labor union or
public pension fund) with a narrowly-focused special interest to use the proxy process to promote a specific agenda
rather than the interests of all shareholders and thereby create the very real risk of politicizing the Board election
process at virtually no cost to the proponent. The nomination of a candidate through the proponent’s proxy access
proposal would convert each such Board election into a contested election in which the proposed director nominee
would only need to win a plurality of votes to be elected. The nomination and election of a director who represents
a shareholder focused on a narrow special interest risks disrupting the Board and favoring the short-term interests
of a few rather than the long-term interests of all shareholders.
Bypasses and Undermines our Current Director Nominating Process. The proponents’ proxy access proposal
seeks to bypass and undermine the Board’s current process for identifying, screening and selecting director
nominees. An effective board is comprised of individuals with diverse and complementary skills, experiences and
perspectives. Our independent Nominating / Corporate Governance Committee and our Board are best situated
to assess the particular qualifications of potential director nominees and determine whether they will contribute
to an effective and well-rounded Board that operates openly and collaboratively and represents the interests of all
shareholders, not just those with special interests.
The Nominating / Corporate Governance Committee has developed criteria and a process for identifying
and recommending director nominees for election by our shareholders (which are described above in the
“Governance — Selection of Nominees by the Board” section of this Proxy Statement). This process is carefully
designed to identify director nominees who possess a combination of skills, professional experiences and diversity
of backgrounds necessary to oversee our business and who can contribute to the overall effectiveness of our
Board. The Committee also carefully reviews and considers the independence of potential nominees. As part of
this process, the Committee considers and evaluates potential nominees recommended by our shareholders using
the same criteria as nominees recommended by a Board member, management, search firm or other source. As a
result, shareholders already have a voice in this process and the ability to recommend prospective nominees for
consideration by the Committee. Proxy access bypasses and undermines our current director nominating process
by placing directly into nomination candidates who may fail to satisfy the independence or other qualifications
established by the Nominating / Corporate Governance Committee and the Board or who may fail to contribute to
the mix of needed experiences and perspectives.