Kroger 2014 Annual Report Download - page 28

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26
The฀2014฀targets฀established฀by฀the฀Committee,฀the฀actual฀fiscal฀2014฀results,฀and฀the฀bonus฀percentage฀
earned฀in฀each฀of฀the฀components฀of฀annual฀cash฀bonus฀were฀as฀follows:
Targets Actual
Performance
Actual
Performance
Compared to
100% Target Amount EarnedComponent Minimum 100%
Identical฀Sales฀without฀supermarket฀
fuel฀(30%) . . . . . . . . . . . . . . . . . . . 1.00% 3.00% 5.17% 172.33% 49.01%
EBITDA฀without฀supermarket฀
fuel฀(30%) . . . . . . . . . . . . . . . . . . . $4.0004฀Billion $4.7064฀Billion $4.7719฀Billion 101.39% 39.59%
Strategic฀Plan฀(30%). . . . . . . . . . . . . . . ** ** ** ** 8.40%
Total฀Operating฀Costs฀as฀percentage฀
of฀sales,฀excluding฀fuel฀(10%)* . . .
Over฀budget฀by฀
25฀basis฀points
Over฀budget฀by฀
5฀basis฀points
Under฀budget฀by฀
14฀basis฀points
19฀basis฀points฀
under target 19.50%
Fuel฀Bonus฀(5%) . . . . . . . . . . . . . . . . . . [As฀described฀in฀the฀text฀above] 5.00%
Total฀Earned. . . . . . . . . . . . . . . . . . . . . 121.50%
*฀ Total฀Operating฀Costs฀were฀budgeted฀at฀26.48%฀as฀a฀percentage฀of฀sales฀for฀fiscal฀year฀2014.
**฀ The฀Strategic฀Plan฀component฀also฀was฀established฀by฀the฀Committee฀at฀the฀beginning฀of฀the฀year,฀but฀is฀
not disclosed as it is competitively sensitive.
Following฀the฀ close฀of฀the฀ year,฀the฀ Committee฀reviewed฀Kroger’s฀ performance฀ against฀ the฀ identical฀
sales฀ without฀ supermarket฀ fuel,฀ EBITDA฀ without฀ supermarket฀ fuel,฀ strategic฀ plan฀ objectives,฀ and฀ total฀
operating฀costs฀as฀a฀percent฀of฀sales,฀excluding฀fuel,฀and฀determined฀the฀extent฀to฀which฀Kroger฀achieved฀
those฀objectives.฀Due฀to฀our฀performance฀when฀compared฀to฀the฀targets฀established฀by฀the฀Committee,฀and฀
based฀on฀the฀business฀plan฀adopted฀by฀the฀Board,฀the฀named฀executive฀officers฀earned฀121.5%฀of฀their฀bonus฀
potentials.฀ This฀ is฀ the฀ same฀ bonus฀ percentage฀ payout฀ received฀ by฀ all฀ other฀ participants฀ in฀ the฀ corporate฀
annual฀bonus฀plan.
In฀2014,฀as฀in฀all฀years,฀the฀Committee฀retained฀discretion฀to฀reduce฀the฀bonus฀payout฀for฀all฀executive฀
officers,฀including฀the฀named฀executive฀officers,฀if฀the฀Committee฀determined฀for฀any฀reason฀that฀the฀bonus฀
payouts฀were฀not฀appropriate฀given฀their฀assessment฀of฀Company฀performance.฀The฀independent฀directors฀
retained฀that฀discretion฀for฀the฀CEO’s฀bonus.฀Those฀bodies฀also฀retained฀discretion฀to฀adjust฀the฀targets฀under฀
the฀plan฀should฀unanticipated฀developments฀arise฀during฀the฀year.฀No฀adjustments฀were฀made฀to฀the฀targets฀
in฀2014.฀The฀Committee,฀and฀the฀independent฀directors฀in฀the฀case฀of฀the฀CEO,฀determined฀that฀the฀bonus฀
payouts฀for฀the฀named฀executive฀officers,฀that฀were฀earned฀based฀on฀2014฀performance,฀should฀not฀be฀adjusted.
The฀ percentage฀ paid฀ for฀ 2014฀ represented฀ excellent฀ performance฀ that฀ exceeded฀ our฀ business฀ plan฀
objectives.฀A฀comparison฀of฀bonus฀percentages฀for฀the฀named฀executive฀officers฀in฀prior฀years฀demonstrates฀
the฀variability฀of฀annual฀cash฀bonus฀incentive฀compensation฀and฀its฀strong฀links฀to฀our฀performance:
Fiscal Year
Annual Cash Bonus
Percentage
2014 121.500%
2013 104.949%
2012 85.881%
2011 138.666%
2010 53.868%
2009 38.450%
2008 104.948%
2007 128.104%
2006 141.118%
2005 132.094%