Big Lots 2015 Annual Report Download - page 38

Download and view the complete annual report

Please find page 38 of the 2015 Big Lots annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 166

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166

Although the Committee and the other outside directors consider our CEO’s recommendations, the
Committee and the other outside directors may elect to not follow, and are not bound by, our CEO’s
recommendations on executive compensation. Our CEO, the Committee and the outside directors may
consider different factors and may value the same factors differently.
Role of Management
Our CEO plays a significant role in determining the compensation of the other members of our
Leadership Team. Additionally, our CEO and the Committee consult with management from our human
resources, finance and legal departments regarding the design and administration of our compensation
programs, plans and awards for executives and directors. These members of management provide the
Committee and CEO with advice regarding the competitiveness of existing and proposed
compensation programs and the impact of accounting rules, laws and regulations on existing and
proposed compensation programs. Management from our human resources, finance and legal
departments also assist the Committee in the administration of our employee benefit and
compensation plans in accordance with the Committee’s charter and our compensation plans.
Our CEO and some members of management attend meetings of the Committee, and the CEO
participates in the Committee’s discussions regarding the compensation of the other Leadership Team
members. These individuals do not participate in executive sessions of the Committee or when
executive compensation determinations are made by the Committee and the other outside directors.
Independent Compensation Consultant
The Committee has the authority under its charter to retain independent compensation consultants as
it deems necessary. In establishing executive compensation for fiscal 2015, the Committee’s
independent compensation consultant, Exequity, provided the Committee with compensation and
financial information from the public filings of the members of our retailer comparator group (as defined
below in the “Comparative Compensation Data” section of this CD&A). The Committee also reviewed
non-customized compensation surveys provided by several independent compensation consultants at
the request of our human resources department.
Comparative Compensation Data
The Committee reviews data regarding the compensation of executives at other companies in its annual
review of the compensation of the members of our Leadership Team. For fiscal 2015, the Committee
reviewed compensation data for a group of retailers similar to us with whom we believe we compete for
talent (the “retailer comparator group”). The factors the Committee considered in selecting companies to
include in the retailer comparator group included revenue (generally one-half to two times our revenue),
gross profit margin (revenue minus cost of goods sold divided by revenues; generally within ten
percentage points of our gross profit margin), geographic location (preference for companies in the
Columbus, Ohio area with whom we compete for talent), inventory turns (cost of goods sold divided by
average inventory; within approximately 50 points of our score), gross margin return on investment (gross
margin dollars divided by average inventory with no set range, but used as an additional reference point),
market capitalization, net income, earnings per share, price-to-earnings ratio and shareholder return. The
companies included in the retailer comparator group for fiscal 2015 were:
Abercrombie & Fitch Dick’s Sporting Goods Genesco
Advance Auto Parts Dollar General Guess
American Eagle Outfitters Dollar Tree/Family Dollar Ross Stores
Ascena Retail Group DSW Tractor Supply
Bed Bath & Beyond Foot Locker Williams – Sonoma
Burlington Stores
26