AutoZone 2014 Annual Report Download - page 37

Proxy
corporate political contributions are approved by the Vice President, Government and Community Relations, in
consultation with the Senior Vice President, General Counsel. The Senior Vice President, General Counsel
provides periodic updates to the Nominating and Corporate Governance Committee and the Board of Directors
on AutoZone’s political contributions.
The Board believes that the disclosure requested in this proposal could place AutoZone at a competitive
disadvantage by revealing its business strategies and priorities. Because parties with interests adverse to
AutoZone also participate in the political process to their business advantage, any unilateral expanded
disclosure, above what is required by law and equally applicable to all similar parties engaged in public debate,
could benefit those parties while harming the interests of AutoZone and our stockholders. The Board believes
that any reporting requirements that go beyond those required under existing law should be applicable to all
participants in the process, and not just to AutoZone.
Accordingly, the Board recommends a vote “AGAINST” this proposal.
Other Matters
We do not know of any matters to be presented at the Annual Meeting other than those discussed in this
Proxy Statement. If, however, other matters are properly brought before the Annual Meeting, your proxies will
be able to vote those matters in their discretion.
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
This Compensation Discussion and Analysis provides a principles-based overview of AutoZone’s
executive compensation program. It discusses our rationale for the types and amounts of compensation that our
executive officers receive and how compensation decisions affecting these officers are made. It also discusses
AutoZone’s total rewards philosophy, the key principles governing our compensation program, and the
objectives we seek to achieve with each element of our compensation program.
What are the Company’s key compensation principles?
Pay for performance. The primary emphasis of AutoZone’s compensation program is linking executive
compensation to business results and intrinsic value creation, which is ultimately reflected in increases in
stockholder value. Base salary levels are intended to be competitive in the U.S. marketplace for executives, but
the more potentially valuable components of executive compensation are annual cash incentives, which depend
on the achievement of pre-determined business goals, and to a greater extent, long-term compensation, which is
based on the value of our stock.
Attract and retain talented AutoZoners. The overall level and balance of compensation elements in our
compensation program are designed to ensure that AutoZone can retain key executives and, when necessary,
attract qualified new executives to the organization. We believe that a company which provides quality products
and services to its customers, and delivers solid financial results, will generate long-term stockholder returns,
and that this is the most important component of attracting and retaining executive talent.
What are the Company’s overall executive compensation objectives?
Drive high performance. AutoZone sets challenging financial and operating goals, and a significant
amount of an executive’s annual cash compensation is tied to these objectives and therefore “at risk”
— payment is earned only if performance warrants it.
Drive long-term stockholder value. AutoZone’s compensation program is intended to support long-term
focus on stockholder value, so it emphasizes long-term rewards. At target levels, the majority of an executive
officer’s total compensation package each year is the potential value of his or her stock options.
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