Pottery Barn 2006 Annual Report Download - page 115

COMPENSATION DISCUSSION AND ANALYSIS
Our Compensation Discussion and Analysis addresses:
• the members and role of our Compensation Committee;
• our process for determining executive compensation;
• our executive compensation philosophy and policies; and
• our fiscal 2006 compensation decisions.
In this “Compensation Discussion and Analysis” section, the terms “we,” “our” and “us” refer to the
Compensation Committee of the Board of Directors of the Company.
Who serves on the Compensation Committee?
The Compensation Committee consisted of Adrian D.P. Bellamy, Jeanne P. Jackson and Richard T. Robertson
from January 30, 2006 until October 30, 2006. Ms. Jackson resigned from the Compensation Committee on
October 30, 2006. From October 31, 2006 until the present, the Compensation Committee consisted of
Mr. Bellamy and Mr. Robertson. Mr. Bellamy serves as Chairman of the Compensation Committee. The Board
for fiscal 2006 determined that each member of the Compensation Committee was independent under the NYSE
rules as currently in effect, was an outside director as such term is defined with respect to Section 162(m) of the
Internal Revenue Code and was a non-employee director under Section 16(b) of the Securities Exchange Act of
1934. None of the committee members has ever served as an officer of the company.
How many times did the Compensation Committee meet during fiscal 2006?
The Compensation Committee held a total of seven meetings during fiscal 2006. At certain of these meetings, the
Chief Executive Officer made recommendations to us with respect to the compensation arrangements for other
executives and with respect to the structure and terms of those officers’ target bonuses and equity-based
compensation. However, the Chief Executive Officer did not participate in the portions of the meetings during
which his own compensation was deliberated and established.
What is the role of the Compensation Committee with respect to executive compensation?
The Compensation Committee administers the company’s compensation programs, including compensation
arrangements and equity plans. Our role is detailed in the Compensation Committee Charter, which was amended
and restated by the Board on March 15, 2006. The Compensation Committee Charter is available on the
company’s website at www.williams-sonomainc.com and is attached to this Proxy Statement as Exhibit A. The
Compensation Committee Charter is also available in print to any shareholder who requests it. Specifically, we:
• Review and approve corporate goals and objectives relevant to the compensation of the Chief Executive
Officer, evaluate the Chief Executive Officer’s performance in light of those goals and objectives, and
review and approve the level of compensation, including base salary, bonus, equity compensation, and
any other benefits or perquisites to be provided to the Chief Executive Officer based on this evaluation;
• Review, make recommendations to the Board regarding, and approve, as appropriate, compensation for
executive officers other than the Chief Executive Officer. Each of the named executive officers is listed in
the Summary Compensation Table appearing in this Proxy Statement;
• Review, make recommendations to the Board regarding, and approve, as appropriate, general
compensation goals and guidelines for the company’s employees;
• Review, make recommendations to the Board regarding, and approve, as appropriate, the compensation
policy for the non-employee directors of the company; and
• Administer, within the authority delegated by the Board, the company’s incentive compensation and
equity-based plans.
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