Pottery Barn 2010 Annual Report Download - page 141

Executive Employment and Retention: In connection with the transition in leadership that occurred upon the
retirement of Mr. Lester and the appointment of Laura J. Alber as our new Chief Executive Officer, the
Compensation Committee consulted with Frederic W. Cook & Co., Inc., or Cook & Co., its independent
compensation consultant, to consider appropriate compensation arrangements for Ms. Alber and our other named
executive officers. The Compensation Committee wanted to create total executive compensation packages that
are competitive with our proxy peer group and which help assure the continued dedication of our named
executive officers and align their interests with those of our shareholders. After consulting with Cook & Co., the
company entered into a new employment agreement with Ms. Alber and management retention agreements with
Ms. Alber and the other named executive officers.
Mr. Lester retired as the company’s Chairman of the Board and Chief Executive Officer on May 26, 2010, the
date of the company’s 2010 shareholder’s meeting. Mr. Lester provided consulting and advisory services to the
company to assist in the transition to the new Chief Executive Officer. Following his retirement, Mr. Lester
served as Chairman Emeritus. During fiscal 2010, Mr. Lester received compensation pursuant to the terms of his
Retirement and Consulting Agreement.
In addition to the above summary, shareholders are urged to read the “Compensation Discussion and Analysis”
section of this Proxy Statement for detail about our executive compensation programs, including information
about the fiscal 2010 compensation of our named executive officers.
We are asking our shareholders to indicate their support for our named executive officer compensation as
described in this Proxy Statement. This vote is not intended to address any specific item of compensation, but
rather the overall compensation of our named executive officers and the philosophy, policies and practices
described in this Proxy Statement. Accordingly, we ask our shareholders to vote “FOR” the following resolution
at the 2011 Annual Meeting:
“RESOLVED, that the company’s shareholders approve, on an advisory basis, the compensation of the
named executive officers, as disclosed in the company’s Proxy Statement for the 2011 Annual Meeting of
Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission,
including the Compensation Discussion and Analysis, the tabular disclosure regarding such compensation
and the accompanying narrative disclosure.”
What vote is required to approve this proposal?
To approve this proposal, a majority of the shares represented and voting at the Annual Meeting and a majority
of the quorum required to transact business at the Annual Meeting must vote “FOR” this proposal.
What will happen if shareholders vote against this proposal?
The say-on-pay vote is advisory, and therefore not binding on the company, the Compensation Committee or our
Board. Our Board and our Compensation Committee value the opinions of our shareholders and to the extent
there is any significant vote against the named executive officer compensation as disclosed in this Proxy
Statement, we will consider our shareholders’ concerns and the Compensation Committee will evaluate whether
any actions are necessary to address those concerns.
Under the rules of the NYSE, brokers are prohibited from giving proxies to vote on executive compensation
matters unless the beneficial owner of such shares has given voting instructions on the matter. This means that if
your broker is the record holder of your shares, you must give voting instructions to your broker with respect to
Proposal 4 if you want your broker to vote your shares on the matter.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE
APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DESCRIBED
IN THIS PROXY STATEMENT PURSUANT TO THE COMPENSATION DISCLOSURE RULES OF
THE SEC.
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