Bed, Bath and Beyond 2013 Annual Report Download - page 58

awards with the value of the option grants. Making stock option awards in dollars also enables the Compensation Committee
to more readily evaluate appropriate aggregate compensation amounts and percentage increases or decreases for executives,
in comparison to making stock option awards in share amounts (the value of which varies depending on the trading price of
the Company’s stock and other factors). In making the awards, the Compensation Committee considered the fair value of
these options on the date of grant determined in accordance with Accounting Standards Codification Topic No. 718,
‘‘Compensation — Stock Compensation’’ (the ‘‘Stock Option Fair Value’’).
All awards of restricted stock and stock options are made under the Company’s 2012 Incentive Compensation Plan (formerly
known as the 2004 Incentive Compensation Plan), approved by the Company’s shareholders (the performance goals under such
plan having been re-approved in 2012), which is the only equity incentive plan under which the Company can currently make
awards of equity compensation.
Senior Executive Compensation
In addition to considering the Company’s compensation policies generally, the Compensation Committee reviews executive
compensation and concentrates on the compensation packages for the Company’s senior executive officers, namely, the Co-
Chairmen (Warren Eisenberg and Leonard Feinstein, who are the Company’s Co-Founders) and the Chief Executive Officer
(Steven H. Temares), believing that these three named executive officers are the most important and influential in determining
the continued success of the Company. The Company has enjoyed considerable success in the years it has been a public
company, and in both fiscal 2012 and fiscal 2013 achieved strong financial results.
For fiscal 2013, the base salaries for the Co-Chairmen remained at $1,100,000, the same as they were for the prior seven
fiscal years. For fiscal 2013, the base salary for Mr. Temares increased by $517,500 to $3,967,500. The Compensation Committee
determined that Mr. Temares’ base salary increase was warranted based on the Company’s strong financial performance and
Mr. Temares’ strong individual performance. Since Mr. Temares did not receive a cash bonus, his salary constitutes his total cash
compensation. According to the analysis prepared by Gallagher, Mr. Temares’ increased base salary for fiscal 2013 resulted in
total cash compensation at the 88th percentile of the 23-company peer group.
For fiscal 2013, the base salary for Mr. Stark increased by $110,000 and the base salary for Mr. Castagna increased by $150,000.
The Compensation Committee determined that these increases were warranted based on the Company’s growth and strong
financial results in 2012 and based on the results and recommendations of Gallagher’s compensation review discussed above.
The aggregate equity awards to Mr. Temares for fiscal 2013 increased from fiscal 2012 by $1,750,000 to $13,500,000, with the
increase comprised of $1,000,000 in stock options and $750,000 in performance-based restricted stock. Of the total of
$13,500,000 of equity awards to Mr. Temares for fiscal 2013, $6,750,000 consisted of stock options (based on the Stock Option
Fair Value) and $6,750,000 consisted of performance-based restricted stock (based on the average of the high and low trading
price of the Company’s common stock on the date of grant). Thus, approximately 71% of Mr. Temares’ total compensation for
fiscal 2013 was dependent on Company performance or increase in shareholder value and vests over a five year period.
The equity awards to Messrs. Eisenberg and Feinstein for fiscal 2013 remained unchanged from fiscal 2012 at $2,000,000 for
each such executive, comprised of $1,500,000 of performance-based restricted stock and $500,000 of stock options (valued on
the same basis as Mr. Temares’ awards).
The aggregate equity awards to each of Mr. Stark and Mr. Castagna for fiscal 2013 increased from 2012 by $100,000, with the
increase comprised of performance-based restricted stock. In connection with his promotion to Chief Operating Officer in
February 2014, Mr. Castagna’s base salary was increased by the Compensation Committee effective upon his promotion to
$1,590,000, and he was awarded 3,683 shares of restricted stock.
The base salary of Ms. Lattmann, who was promoted to Chief Financial Officer in February 2014, was increased by the
Compensation Committee effective upon her promotion to $650,000, and she was awarded 1,473 shares of restricted stock in
connection with the promotion.
For fiscal 2013, the Compensation Committee set Mr. Fiorilli’s base salary at $1,475,000 and granted him aggregate equity
awards totaling $1,800,000, comprised of $1,200,000 of performance-based restricted stock and $600,000 of stock options
(valued on the same basis as Mr. Temares’ awards).
In the view of the Compensation Committee, the base salary and equity 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
BED BATH & BEYOND PROXY STATEMENT
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