MARKET COMPENSATION

Market Compensation

Market Compensation

Step 1

According to a 1996 Paine Webber report, Kroger is a strong company benefiting from its position as a leader in best practices implementation, its modern store base, and the opportunity to improve its profitability. Kroger "has demonstrated its ability to survive competition with non-traditional competitors, a key strength in modern food retailing," said the report. Paine Webber recommended buying Kroger stock. Despite this, the company's stock prices continued to rise, with a high of $37.31 and a low of $22.69 in 1997. Kroger does not pay dividends on its stock, per agreements with creditors. Despite being heavily leveraged, Standard and Poor's reported that Kroger's "can generate a strong cash flow to pay down debt in a timely fashion. Kroger performed well in 2007," vice chairman Rodney McMullen told analysts during the company's fourth quarter conference call. "We delivered on the objectives we established at the beginning of the year, and we improved our position relative to our major competitors in the four key areas of our Customer First plan: our people, our products, our prices and the overall shopping experience we offer to our customers."(Beam, Burton, and McFadden 2007)

According to Krogers executive compensation plan

Executives have a unique role and they have different expectations of compensation:

Decisions made by executives have a great impact on the organization's short-and-long-term results, so their performance requirements are more demanding that those of other employees.

They may have, or be seeking, an ownership position in the organization

Since they are highly paid, taxation presents particular problems

Their highly paid status also creates problems for them relative to employee group benefit plans, since legislation continues to place limitation upon executive-level benefits.

They frequently play an important social role for the organization and must be seen as leaders in the community.

In managing executive compensation programs, employers must balance executive compensation requirements with additional important factors:

Attracting, retaining and motivating qualified executives in a manner that is acceptable to owners or shareholders.

Ensuring that executive compensation is at risk for acceptable performance.

Taking maximum advantage of accounting, taxation and other rules while maintaining focus on the basic intent of compensation.

Determining the impact of executive compensation on other compensation programs.

Kroger is also committed to investing in its store base adding that store remodels are producing results above the company's expectations, and the return on investment for new stores continues to improve.

Step 2

Tom Thumb Sales Compensation

Safeway Inc. is North America's second-largest supermarket chain, and one of the United States' biggest retailers. It dates to 1926, with the merger of Idaho's Skaggs Stores and Los Angeles' Sam Seelig Co. Today, it is most heavily concentrated in the Western states and Canada, with approximately one-third of its 1,750 stores in California. The company also conducts business under the names Von's, Dominick's, Randall's and Tom Thumb. In 2001, it established the Blackhawk Network, a startup company that sells third-party gift cards. Headquartered in Pleasanton, Calif., Safeway (publicly owned since 1990) has approximately 200,000 ...