Bed, Bath and Beyond 2012 Annual Report Download - page 55

Compensation Committee for the named executive officers, other than the Co-Chairmen and Mr. Temares, for fiscal 2012 was
determined by the Compensation Committee, taking into account the recommendations of the Co-Chairmen, Chief Executive
Officer and JFR and certain data the Compensation Committee requested from JFR.
In making its determinations for fiscal 2012, the Compensation Committee engaged JFR to conduct a compensation review for
all executive officers, including the named executive officers and for certain other executives. Under the direction of the
Compensation Committee and in connection with this review, JFR benchmarked the named executive officers’ total
compensation and separately their cash compensation against data from the 23 company peer group. As previously noted, JFR
also benchmarked the named executive officers’ total compensation and separately cash compensation, against data from the
18 company peer group. In light of the Company’s continued strong financial results for fiscal 2011, and the growth and
increasing complexity of the Company’s operations, the Compensation Committee determined, early in fiscal 2012, that all of
the executive officers of the Company, other than the Co-Chairmen, should receive increases in their total compensation
packages for fiscal 2012.
Elements of Compensation
The Company seeks to provide total compensation packages to its associates, including its named executive officers, which
implement its compensation philosophy. The components of the Company’s compensation programs are base salary, equity
compensation (consisting of stock options and restricted stock awards), retirement and other benefits (consisting of health
plans, a limited 401(k) plan match and a nonqualified deferred compensation plan) and perquisites. The Company places
greater emphasis in the compensation packages for named executive officers on equity incentive compensation rather than
cash compensation in order to align compensation more closely with performance results and the creation of shareholder
value. The Company does not have a cash bonus program for executive officers.
Base Salary
The Company pays base salaries to provide its named executive officers with current, regular compensation that is appropriate
for their position, experience and responsibilities. Changes in base salary, if any, are effective in May of each fiscal year. The
Company believes that cash compensation levels for its named executive officers are within or below market range as the
Company places greater emphasis on equity compensation.
Equity Compensation
The Company’s overall approach to equity compensation is to make equity awards comprised of a combination of stock
options and performance-based restricted stock to all executive officers, including the named executive officers, and a small
number of other executives. The Company’s allocation between these two forms of equity awards considers the retention
component and the role of the executive in the enhancement of shareholder value. For the named executive officers other
than the Chief Executive Officer and the Co-Chairmen, the allocation is more weighted toward performance-based restricted
stock in light of this retention component, yet provides a grant of stock options recognizing the role of these executives in the
enhancement of shareholder value. For the Co-Chairmen, the allocation reflects that each of them owns in excess of 1% of the
outstanding common stock of the Company. For the Chief Executive Officer, the more even allocation of equity awards
between performance-based restricted stock and stock options is based on the view that stock options reward executives more
directly for enhancing shareholder value and, therefore, as the executive primarily responsible for that enhancement, the
Chief Executive Officer should have a greater proportion of his equity awards allocated to stock options as compared to the
other executive officers. These grants are made on May 10 of each year (or the following trading day should such date fall on
a weekend or holiday). The vesting provisions relating to equity compensation have been and continue to be determined with
the principal purpose of retaining the Company’s executives and key associates. The Company believes its equity compensation
policies have been highly successful in the long term retention of its executives and key associates, including its named
executive officers.
Consistent with the Company’s historic practice, the stock options vest over time, subject, in general, to the named executive
officers remaining in the Company’s employ on specified vesting dates. Vesting of the restricted stock awarded to these named
executive officers is dependent on (i) the Company’s achievement of a performance-based test for the fiscal year in which the
grant is made, and (ii) assuming achievement of the performance-based test, time vesting, subject, in general, to the executive
remaining in the Company’s employ on the specified vesting dates.
The performance-based test requires that the Company’s net income in the fiscal year is greater than or equal to the
Company’s net income in the prior fiscal year or that the Company’s net income as a percentage of sales place it in the top half
of the companies in the S&P 500 Retailing Index with respect to such measurement. Net income may be adjusted for such
BED BATH & BEYOND PROXY STATEMENT
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