Kroger 2014 Annual Report Download - page 19

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17
CO M M U N I C A T I O N S W I T H T H E B O A R D
The฀ Board฀ has฀ established฀ two฀ separate฀ mechanisms฀ for฀ shareholders฀ and฀ interested฀ parties฀ to฀
communicate฀with฀the฀Board.฀Any฀shareholder฀or฀interested฀party฀who฀has฀concerns฀regarding฀accounting,฀
improper฀use฀of฀Kroger฀assets,฀or฀ethical฀improprieties฀may฀report฀these฀concerns฀via฀the฀toll-free฀hotline฀
(800-689-4609)฀ or฀ email฀ address฀ (helpline@kroger.com)฀ established฀ by฀ the฀ Board’s฀ Audit฀ Committee.฀ The฀
concerns฀ are฀ investigated฀ by฀ Kroger’s฀ Vice฀ President฀ of฀ Auditing฀ and฀ reported฀ to฀ the฀ Audit฀ Committee฀ as฀
deemed฀appropriate฀by฀the฀Vice฀President฀of฀Auditing.
Shareholders฀or฀interested฀parties฀also฀may฀communicate฀with฀the฀Board฀in฀writing฀directed฀to฀Kroger’s฀
Secretary฀at฀our฀executive฀offices.฀The฀Secretary฀will฀consider฀the฀nature฀of฀the฀communication฀and฀determine฀
whether฀to฀forward฀the฀communication฀to฀the฀chair฀of฀the฀Corporate฀Governance฀Committee.฀Communications฀
relating฀to฀personnel฀issues฀or฀our฀ordinary฀business฀operations,฀or฀seeking฀to฀do฀business฀with฀us,฀will฀be฀
forwarded฀to฀the฀business฀unit฀of฀Kroger฀that฀the฀Secretary฀deems฀appropriate.฀All฀other฀communications฀will฀
be฀forwarded฀to฀the฀chair฀of฀the฀Corporate฀Governance฀Committee฀for฀further฀consideration.฀The฀chair฀of฀the฀
Corporate฀Governance฀Committee฀will฀take฀such฀action฀as฀he฀or฀she฀deems฀appropriate,฀which฀may฀include฀
referral฀to฀the฀full฀Committee฀or฀the฀entire฀Board.
AT T E N D A N C E
The฀Board฀held฀five฀meetings฀in฀fiscal฀year฀2014.฀During฀fiscal฀year฀2014,฀all฀incumbent฀directors฀attended฀
at฀least฀75%฀of฀the฀aggregate฀number฀of฀meetings฀of฀the฀Board฀and฀committees฀on฀which฀that฀director฀served.฀
Members฀of฀the฀Board฀are฀expected฀to฀use฀their฀best฀efforts฀to฀attend฀all฀annual฀meetings฀of฀shareholders.฀All฀
thirteen฀members฀then฀serving฀on฀the฀Board฀attended฀last฀year’s฀annual฀meeting.
CO M P E N S A T I O N C O N S U L T A N T S
The฀ Compensation฀ Committee฀ directly฀ engages฀ a฀ compensation฀ consultant฀ from฀ Mercer฀ Human฀
Resource฀Consulting฀to฀advise฀the฀Committee฀in฀the฀design฀of฀compensation฀for฀our฀executive฀officers.฀In฀
2014,฀Kroger฀paid฀that฀consultant฀$294,868฀for฀work฀performed฀for฀the฀Committee.฀Kroger,฀on฀management’s฀
recommendation,฀ retained฀ the฀ parent฀ and฀ affiliated฀ companies฀ of฀ Mercer฀ Human฀ Resource฀ Consulting฀ to฀
provide฀other฀services฀for฀Kroger฀in฀2014,฀for฀which฀Kroger฀paid฀$4,425,282.฀These฀other฀services฀primarily฀
related฀to฀insurance฀claims฀(for฀which฀Kroger฀was฀reimbursed฀by฀insurance฀carriers฀as฀claims฀were฀adjusted),฀
insurance฀ brokerage฀ and฀ bonding฀ commissions,฀ and฀ pension฀ consulting.฀ Kroger฀ also฀ made฀ payments฀ to฀
affiliated฀companies฀for฀insurance฀premiums฀ that฀were฀collected฀by฀the฀affiliated฀companies฀ on฀ behalf฀ of฀
insurance฀carriers,฀but฀these฀amounts฀are฀not฀included฀in฀the฀totals฀referenced฀above,฀as฀the฀amounts฀were฀
paid฀over฀to฀insurance฀carriers฀for฀services฀provided฀by฀those฀carriers.฀Although฀neither฀the฀Committee฀nor฀
the฀Board฀expressly฀approved฀the฀other฀services,฀after฀taking฀into฀consideration฀the฀NYSE’s฀independence฀
standards฀ and฀the฀ SEC฀ rules,฀ the฀Committee฀ determined฀that฀the฀ consultant฀is฀ independent฀and฀ his฀work฀
has฀not฀raised฀any฀conflict฀of฀interest฀because฀(a)฀the฀consultant฀was฀first฀engaged฀by฀the฀Committee฀before฀
he฀became฀associated฀with฀Mercer;฀(b)฀the฀consultant฀works฀exclusively฀for฀the฀Committee฀and฀not฀for฀our฀
management;฀ (c)฀ the฀ consultant฀ does฀ not฀ benefit฀ from฀ the฀ other฀ work฀ that฀ Mercer’s฀ parent฀ and฀ affiliated฀
companies฀perform฀for฀Kroger;฀and฀(d)฀neither฀the฀consultant฀nor฀the฀consultant’s฀team฀perform฀any฀other฀
services฀for฀Kroger.฀The฀Committee฀may฀engage฀an฀additional฀compensation฀consultant฀from฀time฀to฀time฀as฀
it฀deems฀advisable.
CO M P E N S A T I O N C O M M I T T E E I N T E R L O C K S A N D I N S I D E R P A R T I C I P A T I O N
No฀member฀of฀the฀Compensation฀Committee฀was฀an฀officer฀or฀employee฀of฀Kroger฀during฀fiscal฀year฀
2014,฀and฀no฀member฀of฀the฀Compensation฀Committee฀is฀a฀former฀officer฀of฀the฀Company฀or฀was฀a฀party฀
to฀any฀disclosable฀related฀person฀transaction฀involving฀the฀Company.฀During฀fiscal฀year฀2014,฀none฀of฀our฀
executive฀officers฀served฀on฀the฀board฀of฀directors฀or฀on฀the฀compensation฀committee฀of฀any฀other฀entity฀that฀
has฀or฀had฀executive฀officers฀serving฀as฀a฀member฀of฀the฀Board฀of฀Directors฀or฀Compensation฀Committee฀of฀
the฀Company.