Retail grocery sales represent a significant portion of the U.S. economy. In 2006, grocery stores in the U.S. generated $900 billion in sales. The industry is highly competitive, with companies operating on low gross and net margins. As a result, grocery stores are generally under significant pressure to reduce their operating costs in order to remain profitable. For the last several decades, the grocery industry grew roughly in line with gross domestic product and was considered a mature industry. In order for companies to succeed, they needed to find effective strategies to steal customers from competitors. Many sought to differentiate themselves through store format, store location, product mix, ancillary services, or quality of customer service. Strategies, however, could easily be imitated by competitors, putting grocery store chains under constant pressure to innovate and remain efficient. In general, growth required expansion into new store locations. Because most markets are already saturated with incumbent players, growth came through acquisition. The retail grocery industry is capital intensive, requiring significant investment in new stores and store models. Companies that failed to grow often went bankrupt or were acquired. Additionally, as a low-cost provider and the dominant retailer in the U.S., Wal-Mart’s presence in the grocery industry added to the pressure on all other providers to differentiate their offerings and develop new strategies to survive. This case explores executive compensation at four retail grocery stores: Safeway, Kroger, Costco, and Whole Foods. Consideration is given to each company's strategy and market position and corporate governance