Pottery Barn 2011 Annual Report Download - page 139

The following table, which is based on publicly available information as of March 27, 2012 as provided by
Cook & Co., provides a financial overview of the comparable companies to illustrate their revenues, income, and
market capitalization as a group relative to the company. The Compensation Committee may review additional
benchmarking surveys and proxy data providing summarized data levels of base salary, target annual cash
incentives, and equity-based and other long-term incentives to assess market competitiveness of our
compensation programs for our named executive officers.
Annual
Net Revenue
(in millions)
Annual
Net Income
(in millions)
Market Capitalization
(in millions)
(as of 1/31/2012)
75th Percentile ........................................ $8,721 $677 $10,101
Average ............................................. $6,125 $363 $ 6,016
Median .............................................. $4,891 $215 $ 3,986
25th Percentile ........................................ $3,050 $105 $ 1,721
Williams-Sonoma, Inc. ................................. $3,721 $237 $ 3,695
How are base salaries determined?
Base salaries are paid to provide executives and other employees with a minimum fixed level of cash
compensation each year. The Compensation Committee believes that executive officers’ base salaries must be
sufficiently competitive to attract and retain key executives, and believes targeting base salaries between the 50th
and 75th percentiles among the proxy peer group is generally appropriate to meet these objectives. In
determining executive base salaries, the Compensation Committee also considers overall company performance
and performance relative to peer companies generally and the home furnishings industry specifically.
After a review of the base salaries of the named executive officers relative to proxy peer group and market
survey data and each executive’s experience as well as past, current and anticipated contributions to the
Company’s success, the Chief Executive Officer proposed changes to the base salaries of all of the named
executive officers (other than the Chief Executive Officer), including for Ms. Stangl, who was not a named
executive officer at that time, along with increases to the respective bonus targets for Mr. Connolly, Mr. Harvey,
and Ms. Stangl. The Chief Executive Officer proposed these changes so that the base salaries and bonus targets
of the named executive officers would bring the executives to at or above the 75th percentile for target total cash
compensation compared to the company’s proxy peer group and relevant market data as described above. The
Compensation Committee determined that targeting total cash compensation at the 75th percentile or higher for
the named executive officers was appropriate.
The Compensation Committee reviewed and approved the following base salaries of the named executive
officers for fiscal 2011 at the Compensation Committee meeting held on March 22, 2011:
Named Executive Officer Fiscal 2010 Base Salary Fiscal 2011 Base Salary
Laura J. Alber ................................. $975,000 $1,200,000
Sharon L. McCollam ............................ $850,000 $ 875,000
Patrick J. Connolly ............................. $581,400 $ 625,000
Richard Harvey ................................ $600,000 $ 675,000
Sandra Stangl ................................. $575,000 $ 750,000
In fiscal 2012, consistent with an amendment to the Compensation Committee Charter in 2011, the base salary
for our Chief Executive Officer will be determined by the independent members of the Board following receipt
of a recommendation from the Compensation Committee.
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Proxy