COLUMBUS, Ohio — Big Lots has reappointed Russell Solt to its board of directors after determining that the move is in the best interests of the company and its shareholders.
Solt will also continue to serve as chairman of the compensation committee, which is composed entirely of independent non-executive directors. Consistent with the terms of the company's other directors, Solt's term will run until the 2014 annual meeting of shareholders.
At this year’s annual meeting, which took place in May, Solt failed to garner a majority of the shareholder vote in support of reelection. As a result, Solt offered to resign from the board in accordance with the company's corporate governance guidelines. After careful deliberation and following the recommendation of the nominating and corporate governance committee, the board opted to not accept Solt's resignation. Solt did not participate in the either the board’s or the committee's evaluation.
"The board of directors respects the views of our shareholders and, throughout the past year, the compensation committee and board have listened and taken significant steps to address concerns raised by our shareholders related to executive compensation practices, including reducing the overall CEO compensation package and more closely aligning compensation with shareholder returns," said Philip E. Mallott, chairman of the board. "As chairman of the compensation committee, Russell led these efforts and, together with other committee members and independent advisers, is currently evaluating further improvements to our executive compensation program. We believe that shareholders are best served by Russell's continued involvement in this process. In addition, Russell's financial expertise, knowledge of our business, and extensive experience in the retail industry make him a significant contributor to the overall work of our board of directors."
In making its determination, the board considered a number of factors that make Solt well suited to keeping his spot, including his experience as the CFO of other publicly traded retailers, his background in investor relations, his experience as a certified public accountant and his qualification as an audit committee financial expert. The board also believes that Solt’s departure would be disruptive to its efforts to develop a long-range business plan with the new CEO.
The company also engaged directly with a number of shareholders, as well as with proxy advisory firms ISS and Glass Lewis, to better understand the concerns that led to a majority of shareholders withholding votes from Solt in May. These concerns appear not to have been directed at Solt personally, but were principally related to previous executive compensation practices that were changed in May.
As previously disclosed, in May, the board separated the roles of CEO and chairman and several key changes were made to the company's executive compensation program, including reducing the overall CEO compensation package, changing elements of the equity compensation awarded to the new CEO to be more focused on shareholder return metrics, eliminating certain excise tax reimbursement payments, and including a clawback provision in senior management employment agreements. In addition, the compensation committee is currently working with an independent compensation consultant to analyze the company's long-term incentive compensation program and recommend further changes.
Big Lots operates 1,514 Big Lots stores in the 48 contiguous United States, 3 Big Lots store in Canada, and 76 Liquidation World and LW stores in Canada. Wholesale operations are conducted through Big Lots Wholesale, Consolidated International, and Wisconsin Toy and with online sales at www.biglotswholesale.com.