Bed, Bath and Beyond 2012 Annual Report Download - page 52

EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
The following is a discussion and analysis of our compensation programs as they apply to the Company’s principal executive
officer, principal financial officer and the three most highly compensated executive officers of the Company (other than its
principal executive officer and principal financial officer) for fiscal 2012 (‘‘named executive officers’’) whose compensation
information is presented in the Summary Compensation Table and other tables following this discussion and analysis.
Overview of Executive Compensation
Since becoming a public company over 20 years ago, the Company has been engaged in an ongoing expansion program
involving principally the opening of new stores, the expansion or relocation of existing stores, and the continuous review of
strategic acquisitions. Recently the Company embarked on several initiatives, including initiatives designed to create an
enhanced omni channel experience for its customers. In addition, during the early months of fiscal 2012, the Company’s
executives negotiated and then consummated several acquisitions, including a retailer selling a wide range of home
decorating items, furniture, gifts, holiday and other seasonal items and specialty food and beverages; and a distributor of a
variety of textile products, amenities and other goods to institutional customers. The Compensation Committee’s
determinations regarding executive compensation for fiscal 2012 were made in the context of these initiatives which added
substantially to the size and scope of the Company’s operations.
The Company has experienced strong growth and financial stability in the 42 years of its existence and, in particular, in the
years since it became a public company in 1992. The Company believes that a key factor in this performance has been the
stability of its executive team. Including Warren Eisenberg and Leonard Feinstein, the Company’s Co-Chairmen and
Co-Founders, each of whom has served the Company’s business for over 40 years, the Company’s executive officers have an
average tenure with the Company of over 30 years. The Company’s policy is to seek whenever possible, at all levels, to
promote from within and to compensate executives in a manner designed to promote the long-term success of the
organization. Thus, the Company has been managed by a cohesive group of executives most of whom have worked together,
and contributed to the Company’s success, for many years.
The Compensation Committee’s principal objective is to develop and implement compensation policies to retain this successful
executive group, while at the same time aligning the executives’ compensation with the Company’s performance and
enhancements to shareholder value. The cash compensation levels for our named executive officers (our Co-Chairmen, Chief
Executive Officer, President and Chief Financial Officer) and the other executive officers whose compensation is determined by
the Compensation Committee are within or near market range principally because their sole cash compensation is salary; the
Company has no bonus program for these executives or the other executives whose compensation is determined by the
Compensation Committee. The Compensation Committee places greater emphasis on equity compensation, consisting of stock
options and restricted stock. Further, the Company’s equity compensation programs include substantial time vesting provisions
which provide greater incentives for the executives to remain with the Company and to focus on the Company’s performance
over an extended period. Consequently, as a group, the Company’s named executive officers had approximately 67% of their
total compensation for fiscal 2012 in the form of equity awards vesting over, in most cases, a period of five years.
The Compensation Committee’s determinations regarding total executive compensation for fiscal 2012, made in the spring of
2012, took into account, among other things, the following:
• Net sales in fiscal 2011 increased approximately 8.5% to $9.500 billion from $8.759 billion in fiscal 2010 and net earnings per
diluted share in fiscal 2011 increased 32% to $4.06 from $3.07 in fiscal 2010.
• From fiscal 2009 through the end of fiscal 2011, the Company had an average annual growth in net sales of 9.6% and an
average annual growth in net earnings per diluted share of 35.3%.
• From fiscal 2009 through fiscal 2011, the Company had returned approximately 64%, or approximately $2.0 billion, of its
cash flow from operations to its shareholders through the Company’s share repurchase programs.
• Since the initial public offering of its common stock in 1992 through the end of fiscal 2011, the Company experienced an
average annual growth rate in net sales of 22.0% and an average annual growth in net earnings per diluted share of 24.8%.
BED BATH & BEYOND PROXY STATEMENT
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