Bed, Bath and Beyond 2011 Annual Report Download - page 51

BED BATH & BEYOND PROXY STATEMENT
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In the view of the Compensation Committee, the base salary, stock option grants, and performance-based restricted stock awards
constitute compensation packages for the Chief Executive Officer and for the Co-Chairmen, as well as the other named executive
officers, which are appropriate for a company with the revenues and earnings of the Company. The stock options granted to the
Chief Executive Officer vest in five equal annual installments, while the stock options awarded to the Co-Chairmen vest in three
equal annual installments, in each case commencing on the first anniversary of the grant date and based on continued service to
the Company. The restricted stock awards to each such executive are conditioned on the performance-based test described above
with time vesting in five equal annual installments, in each case commencing on the first anniversary of the grant date and based
on continued service to the Company.
For further discussion related to equity grants to the named executive officers, see “Potential Payments Upon Termination or
Change in Control” below.
Other Benefits
The Company provides the named executive officers with the same benefits offered to all other associates. The cost of these
benefits constitutes a small percentage of each named executive officer’s total compensation. Key benefits include paid vacation,
premiums paid for long-term disability insurance, a matching contribution to the named executive officer’s 401(k) plan account,
and the payment of a portion of the named executive officer’s premiums for healthcare and basic life insurance.
The Company has a nonqualified deferred compensation plan for the benefit of certain highly compensated associates, including
the named executive officers. The plan provides that a certain percentage of an associate’s contributions may be matched
by the Company, subject to certain limitations. This matching contribution will vest over a specified period of time. See the
“Nonqualified Deferred Compensation Table” below.
The Company provides the named executive officers with certain perquisites including tax preparation services and car service, in
the case of Messrs. Eisenberg and Feinstein, and a car allowance, in the case of all named executive officers. The Compensation
Committee believes all such perquisites are reasonable and consistent with its overall objective of attracting and retaining our
named executive officers.
See the “All Other Compensation” column in the Summary Compensation Table for further information regarding these benefits
and perquisites, and “Potential Payments Upon Termination or Change in Control” below for information regarding termination
and change in control payments and benefits.
Impact of Accounting and Tax Considerations
The Compensation Committee considers the accounting cost associated with equity compensation and the impact of
Section 162(m) of the Code, which generally prohibits any publicly held corporation from taking a federal income tax deduction
for compensation paid in excess of $1 million in any taxable year to certain executives, subject to certain exceptions for
performance-based compensation. Stock options and performance-based compensation granted to our named executive officers
are intended to satisfy the performance-based exception and be deductible. Base salary amounts in excess of $1 million are not
deductible by the Company.
Policy on the Recovery of Incentive Compensation
In fiscal 2009, the Board adopted a policy as part of the Company’s corporate governance guidelines on the recovery of incentive
compensation, commonly referred to as a “clawback policy,” applicable to the Company’s named executive officers (as defined
under Item 402(a)(3) of Regulation S-K). The Compensation Committee is monitoring the issuance of regulations under the Dodd-
Frank Wall Street Reform and Consumer Protection Act relating to incentive compensation recoupment and will amend its policy
to the extent necessary to comply with such Act.
Conclusion
After careful review and analysis, the Company believes that each element of compensation and the total compensation provided
to each of its named executive officers is reasonable and appropriate. The value of the compensation payable to the named
executive officers is significantly tied to the Company’s performance and the return to its shareholders over time. The Company
believes that its compensation programs will allow it to retain the executives who are part of the Company’s executive team and
attract highly qualified executives when new executives are required.