Ross Stores (ROST)

CEO Compensation

For fiscal 2008, we increased the base salary paid to the CEO by 1.2% over the prior year based on the annual Company-wide review process. The annual incentive bonus portion of the CEO’s compensation is based on the Company's achievement of targeted pre-tax earnings, as established by the Compensation Committee. During fiscal 2008, the Company’s results were above the target threshold pre-tax earnings goal (see Grants of Plan-Based Awards Table on page 30). As a result, Mr. Balmuth received a bonus of $1,721,369 for fiscal 2008.

The process of setting and structuring compensation for our CEO includes an assessment of the CEO compensation packages offered by comparable retail companies. In 2007, in conjunction with the renewal of the CEO’s employment agreement, we conducted a review of the compensation practices of a peer group of companies to assess the relative competitiveness of our CEO compensation. This review was conducted for the compensation awarded to the CEO in March 2007, for which the Committee engaged the compensation consulting firm of Towers Perrin to perform a review of publicly available Proxy Statement disclosures for selected retailers listed above. The Committee also evaluated the financial and operating performance of those companies over a three and six year timeframe to gauge the Company’s comparative performance relative to this peer group. As indicated above, in 2008 the Committee retained Hewitt Associates to assist with, among other things, fiscal 2009 CEO compensation consulting.

The Compensation Committee utilized this practice of assessing CEO compensation levels and performance history among peer group companies to provide a reference point for fiscal 2007 and fiscal 2008 discussions of compensation for our CEO. However, true analogs to Ross are difficult to find in the traditional retail apparel sector. The Compensation Committee believes that the CEO’s off-price industry skills, familiarity with the Company and senior management expertise are critical to the continued success of the Company. In addition, the Compensation Committee’s strong belief is that continuity of leadership at the CEO level has been key to the Company’s successful long-term performance. Therefore, the Compensation Committee pays significant attention to long-term equity incentives in structuring compensation packages for our CEO, with performance and retention over the longer term being the foremost consideration.

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CEO Compensation

For fiscal 2007, we increased the base salary paid to the CEO by 2.5% over the prior year based on the annual Company-wide review process. The annual incentive bonus portion of the CEO’s compensation is based on the Company's achievement of targeted pre-tax earnings, as established by the Compensation Committee. During fiscal 2007, the Company’s results were below the target but above the minimum threshold pre-tax earnings goal (see Grants of Plan-Based Awards Table on page 40). The previously set incentive compensation bonus payout level at target for the CEO was changed in fiscal 2007 from 75% to 100%, based on the March 2007 Towers Perrin executive compensation study discussed below. As a result, Mr. Balmuth received a bonus of $906,416 for fiscal 2007.

The process of setting and structuring compensation for our CEO includes an assessment of the CEO compensation packages offered by comparable retail companies. Every two years, in conjunction with the renewal of the CEO’s employment agreement, we conduct a review of the compensation practices of a peer group of companies to assess the relative competitiveness of our CEO compensation. The last review was conducted for the compensation awarded to the CEO in March 2007, for which the Committee engaged the compensation consulting firm of Towers Perrin to perform a review of publicly available Proxy Statement disclosures for selected retailers listed above. The Committee also evaluated the financial and operating performance of those companies over a three and six year timeframe to gauge the Company’s comparative performance relative to this peer group.

The Compensation Committee utilized this practice of assessing CEO compensation levels and performance history among peer group companies to provide a reference point for fiscal 2007 discussions of compensation for our CEO. However, true analogs to Ross are difficult to find in the traditional retail apparel sector. The Compensation Committee believes that the CEO’s off-price industry skills, familiarity with the Company and senior management expertise are critical to the continued success of the Company. In addition, the Compensation Committee’s strong belief is that continuity of leadership at the CEO level has been key to the Company’s successful long-term performance. Therefore, the Compensation Committee pays significant attention to long-term equity incentives in structuring compensation packages for our CEO, with performance and retention over the longer term being the foremost consideration.

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CEO Compensation

For fiscal 2006, the base salary paid to the CEO increased by 2% over the prior year as part of the annual Company-wide focal review process. The annual incentive bonus portion of the CEO’s compensation is based on the Company’s achievement of targeted pre-tax earnings, as established by the Compensation Committee. During fiscal 2006, the Company’s results were above the target but below the maximum threshold pre-tax earnings goal (see Grants of Plan-Based Awards Table on page 16). The previously set incentive compensation bonus level at target for the CEO has remained unchanged following the March 2005 Watson Wyatt executive compensation study discussed below. As a result, Mr. Balmuth received a bonus of $1,099,848 for fiscal 2006.

The process of setting and structuring compensation for our CEO includes an assessment of the CEO compensation packages offered by comparable retail companies. Every two years, in conjunction with the renewal of the CEO’s employment agreement, a review is conducted of the compensation practices of a peer group of companies to assess the relative competitiveness of our CEO compensation. The last review was conducted for the compensation awarded to the CEO in March 2005, for which we engaged the compensation consulting firm of Watson Wyatt to perform a review of publicly available Proxy Statement disclosures for selected retailers. We also evaluated the financial and operating performance of those companies over a three and six year timeframe to gauge the Company’s comparative performance relative to this peer group.

The Compensation Committee has continued this practice of assessing CEO compensation levels and performance history among peer group companies in order to provide a reference point for fiscal 2007 discussions of compensation for our CEO. However, true analogs to Ross are difficult to find in the traditional retail apparel sector. The Compensation Committee believes that the CEO’s off-price industry skills, familiarity with the Company and senior management expertise are critical to the continued success of the Company. In addition, the Compensation Committee’s strong belief is that continuity of leadership at the CEO level has been key to the

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