This excerpt taken from the GWW DEF 14A filed Mar 13, 2009.
The Compensation Committee of the Board is responsible for the Company's compensation programs.
The Compensation Committee of the Board oversees the Company's compensation and benefits for all officers and employees. The Compensation Committee is responsible for ensuring that the Company's compensation practices reflect the highest level of integrity and that these practices protect the interests of shareholders. One of its responsibilities is to make certain that a competitive compensation structure is in place that will attract, reward, and retain employees and to motivate them to grow the business profitably. The Committee is also charged with ensuring that compensation, especially for the senior management, is linked to performance.
Under its charter, the Committee both makes executive compensation decisions and recommends actions to the Board of Directors and to the shareholders, as appropriate. In discharging its responsibilities, the Committee regularly consults with independent advisors, compensation consultants, and the Company's management. The Compensation Committee's charter can be found in the Corporate Governance section of Grainger's Web site at www.grainger.com/investor.