Bed, Bath and Beyond 2015 Annual Report Download - page 58

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PROPOSAL 6—SHAREHOLDER PROPOSAL REGARDING SHAREHOLDER APPROVAL
OF CERTAIN FUTURE SEVERANCE AGREEMENTS
We have been notified that the following shareholder proposal will be presented for consideration at the Annual Meeting.
Promptly upon receipt of an oral or written request we will provide you with the name and address of, and number of shares
held by, each proponent.
RESOLVED: that the shareholders of Bed Bath & Beyond Inc. (“the Company”) urge the Board of Directors to seek
shareholder approval of future severance agreements with senior executives that provide benefits in an amount exceeding
2.99 times the sum of the executives’ base salary plus bonus.
“Future severance agreements” include employment agreements containing severance provisions, special retirement
provisions and agreements renewing, modifying or extending existing agreements.
“Benefits” include lump-sum cash payments (including payments in lieu of medical and other benefits); the payment of any
“gross-up” tax liability; the estimated present value of special retirement provisions; any stock or option awards that are
awarded under any severance agreement; any prior stock or option awards as to which the executive’s access is accelerated
under the severance agreement; fringe benefits; and consulting fees (including reimbursable expenses) to be paid to the
executive.
SUPPORTING STATEMENT
We believe that requiring shareholder ratification of “golden parachute” severance packages with a total cost exceeding 2.99
times an executive’s base salary plus bonus will provide valuable feedback, encourage restraint, and strengthen the hand of
the Board’s compensation committee.
According to the Summary of Potential Payments Upon Termination or Change in Control on page 36 of the Company’s 2015
Proxy Statement, if there is a change of control and the chief executive officer is terminated, he will receive three times the
sum of his base salary. According to the Company’s 2015 Proxy Statement, if there had been a change of control and
termination on February 28, 2015, the CEO would have received a cash severance of $11.9 million upon termination, in
addition to payments for equity awards and other benefits. In the CEO’s case, he would receive a total of $62.6 million in a
change in control and termination scenario.
If you agree with us that the Company should seek shareholder ratification of severance packages with a total cost exceeding
2.99 times an executive’s base salary plus bonus, then please VOTE FOR this proposal.
The Board of Directors Recommends a Vote Against Proposal 6
The Compensation Committee works to structure the Company’s compensation program to attract, incentivize and retain
executives to carry out our business strategy. The Compensation Committee requires flexibility in a dynamic environment
where competitive compensation structures and applicable laws are subject to change. The Company’s active engagement
with shareholders is, and will continue to be, a more productive means of ensuring accountability in designing executive
compensation arrangements than the proposal’s requirements of requiring shareholder approval for each severance
agreement.
The Board recommends a vote against proposal 6 because:
• The proposed policy could adversely impact the Company’s ability to secure high-performing executives.
• The Compensation Committee has evolved in its approach to severance arrangements for executives, without the need
for a rigid policy.
• Accelerated vesting of equity awards is appropriate given our compensation practices, which do not include cash
bonuses for executives.
• We seek and obtain shareholder feedback on compensation issues.
The proposed policy would be unduly restrictive and could adversely impact the Company’s ability to secure high-
performing executive talent in the future.
The structure of compensation and retention programs in the marketplace for talent is constantly changing. Tax policy and
legal requirements evolve over time as well. The severance aspects of an executive compensation package will often be
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