Ross Stores (ROST)

Compensation Philosophy

The Company’s compensation policies aim to align the financial interests of the Company’s management with those of its stockholders.  The Company’s executive compensation philosophy seeks also to integrate executive pay with the long-term strategic objectives of the Company, recognize individual initiative and achievements, and assist the Company in attracting, motivating and retaining a group of high-performing executives.  

Compensation for the Company’s executive officers, including the executive officers named in the Summary Compensation Table, consists of the following elements:  base salary, annual incentive bonus and equity awards in the form of restricted stock grants and stock option grants, and other benefits typically offered to corporate executives.  Prior to May 2004, equity awards were made under the 1988 Restricted Stock Plan, the 1992 Stock Option Plan and the 2000 Equity Incentive Plan (“Prior Option Plans”).  In May 2004, the Company’s stockholders approved a proposal that replaced the three then existing equity plans with an omnibus equity plan known as the 2004 Equity Incentive Plan. 

A majority of the total potential compensation for the Company’s executive officers is in the form of annual incentive bonuses under the Incentive Compensation Plan and stock plan awards that may vary according to the Company’s achievement of its strategic objectives and individual performance levels.  The Committee believes that the components of the total compensation program for executives outlined in this report work together to enable the Company to attract, motivate and retain the executive talent necessary to successfully execute the Company’s strategies over the long term in a challenging retail environment.

Compensation Philosophy

The Company’s compensation policies aim to align the financial interests of the Company’s management with those of its stockholders.  The Company’s executive compensation philosophy seeks also to integrate executive pay with the long-term strategic objectives of the Company, recognize individual initiative and achievements, and assist the Company in attracting, motivating and retaining a group of high-performing executives.  

Compensation for the Company’s executive officers, including the executive officers named in the Summary Compensation Table, consists of the following elements:  base salary, annual incentive bonus and equity awards in the form of restricted stock grants and stock option grants, and other benefits typically offered to corporate executives.  Prior to May 2004, equity awards were made under the 1988 Restricted Stock Plan, the 1992 Stock Option Plan and the 2000 Equity Incentive Plan (“Prior Option Plans”).  In May 2004, the Company’s stockholders approved a proposal that replaced the Prior Option Plans and the 1988 Restricted Stock Plan with an omnibus equity plan known as the 2004 Equity Incentive Plan. 

A majority of the total potential compensation for the Company’s executive officers is in the form of annual incentive bonuses under the Incentive Compensation Plan and stock plan awards that may vary according to the Company’s achievement of its strategic objectives, in addition to those motivational and retentive factors deemed necessary and appropriate by the Committee.  The Committee believes that the components of the total compensation program for executives outlined in this report work together to enable the Company to attract, motivate and retain the executive talent necessary to successfully execute the Company’s strategies over the long term in a challenging retail environment.