Pottery Barn 2010 Annual Report Download - page 142

PROPOSAL 5
ADVISORY VOTE ON THE FREQUENCY OF AN ADVISORY VOTE ON
EXECUTIVE COMPENSATION
What is this proposal?
This is a proposal asking shareholders to indicate, on an advisory basis, how frequently we should seek an
advisory vote on the compensation of our named executive officers in accordance with the Dodd-Frank Act, as
disclosed pursuant to the applicable proposed SEC compensation disclosure rules, such as Proposal 4 included on
page 44 of this Proxy Statement. By voting on this Proposal 5, shareholders may indicate whether they would
prefer an advisory vote on named executive officer compensation once every year, two years or three years.
After careful consideration of this proposal, our Board has determined that an advisory vote on executive
compensation that occurs annually is the most appropriate alternative for the company, and therefore our Board
recommends that you vote for a one-year interval for the advisory vote on executive compensation.
In formulating its recommendation, our Board considered that an annual advisory vote on executive compensation
will allow us to obtain information on shareholders’ views of the compensation of our named executive officers on
a consistent basis, by allowing our shareholders to provide us with direct input on our compensation philosophy,
policies and practices as disclosed in the proxy statement every year. Since the compensation of our named
executive officers is evaluated, adjusted and approved on an annual basis, an annual advisory vote will provide the
Board and Compensation Committee with the best opportunity to take shareholder sentiment into consideration in
making decisions with respect to executive compensation. Finally, we believe an annual advisory vote on the
compensation of our named executive officers aligns more closely with our objective to engage in regular dialogue
with our shareholders on corporate governance matters, including our executive compensation philosophy, policies
and programs. We understand that our shareholders may have different views as to what is the best approach for the
company, and we look forward to hearing from our shareholders on this proposal.
You may cast your vote on your preferred voting frequency by choosing the option of one year, two years or
three years or abstain from voting when you vote in response to the resolution set forth below.
“RESOLVED, that the option of once every one year, two years or three years that receives the highest
number of votes cast for this resolution will be determined to be the preferred frequency with which the
company is to hold an advisory shareholder vote to approve the compensation of the named executive
officers, as disclosed pursuant to the Securities and Exchange Commission’s compensation disclosure rules,
including the Compensation Discussion and Analysis, the tabular disclosure regarding such compensation
and the accompanying narrative disclosure.”
What will be the frequency for the advisory vote on executive compensation selected by shareholders?
The option of one year, two years or three years that receives the highest number of votes cast by shareholders
will be the frequency for the advisory vote on executive compensation that has been selected by shareholders.
What will happen as a result of the shareholder vote on this proposal?
This frequency vote is advisory and therefore not binding on the Board or the company in any way, and therefore
the Board may decide that it is in the best interests of our shareholders and the company to hold an advisory vote
on executive compensation more or less frequently than the option approved by our shareholders.
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 5 if you want your broker to vote your shares on the matter.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE
OPTION OF ONCE EVERY ONE YEAR AS THE FREQUENCY WITH WHICH SHAREHOLDERS
ARE PROVIDED AN ADVISORY VOTE ON EXECUTIVE COMPENSATION, AS DISCLOSED
PURSUANT TO THE COMPENSATION DISCLOSURE RULES OF THE SEC.
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