Pottery Barn 2011 Annual Report Download - page 146

Does the company have a policy regarding recovery of past awards or payments in the event of a financial
restatement?
Although we do not currently have a formal policy regarding recovery of past awards or payments in the event of
a financial restatement, we support the review of performance-based compensation following a restatement that
impacts the achievement of performance targets relating to that compensation, followed by appropriate action.
These actions may include recoupment of cash or other incentives, as well as employment actions including
termination. Further, we will implement any recovery policies required by applicable law, including anticipated
SEC rulemaking under the Dodd-Frank Act.
How is the Chief Executive Officer compensated?
Ms. Alber’s fiscal 2011 compensation package was based on:
• A review of the compensation paid to chief executive officers of companies in the peer group (based on
the process described above);
• Company performance;
• Individual performance; and
• Our general compensation philosophy as described above.
In executive session at its meeting in March, 2011, without the Chief Executive Officer present, the
Compensation Committee reviewed Ms. Alber’s base salary. After a discussion of Ms. Alber’s individual
performance and company performance and a review of her total compensation and that of other Chief Executive
Officers in our proxy peer group, the Compensation Committee adjusted her 2011 target total cash compensation
to fall slightly below the 75th percentile of our proxy peer group. Ms. Alber’s actual bonus payouts for fiscal
2011 are discussed above.
Are there any other benefits considerations?
In fiscal 2011, the Compensation Committee authorized and approved the reimbursement of expenses for
financial counseling services of up to $12,000 annually for each of Sandra Stangl, President, Pottery Barn, and
Richard Harvey, President, Williams-Sonoma. The financial counseling services may include services related to
financial planning, tax planning and preparation, and estate planning.
The Compensation Committee believes it is in the Company’s best interest to provide senior executives with
financial counseling services as an effective executive retention tool. These executives have complex financial
planning requirements that require significant time and attention. The Committee believes that providing
Company-subsidized financial services will give the executive appropriate support to plan for his or her financial
security and maximize the net financial reward to the executive from the Company’s compensation and benefits
programs. In addition, reducing the amount of time and attention the executive may spend on these matters
should enable the executive to devote more time to the Company’s business needs.
Do the named executive officers have change of control arrangements?
On May 25, 2010, the company approved a Management Retention Agreement with each of Patrick Connolly,
Richard Harvey and Sandra Stangl. As noted in the section titled “Employment Contracts and Termination of
Employment and Change-of-Control Arrangements” beginning on page 31, if within 18 months following the
change of control the employment of any of these executives is terminated without cause or the executive
voluntarily terminates his or her employment for good reason, the executive will be entitled to certain severance
benefits. On June 11, 2010, the company entered into a Management Retention Agreement with each of Ms.
Alber and Ms. McCollam. Ms. McCollam retired from her executive officer positions effective March 6, 2012
and is no longer covered by her Management Retention Agreement. As noted in the section titled “Employment
Contracts and Termination of Employment and Change-of-Control Arrangements” beginning on page 31, if
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