Pottery Barn 2012 Annual Report Download - page 123

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In determining final bonus amounts, if any, the Compensation Committee verifies the company’s actual
performance for each performance period, reviews management’s recommendation for the resulting aggregate
bonus awards and approves an aggregate award amount. The Compensation Committee also reviews and
approves the individual bonuses payable, if any, to each of the company’s named executive officers under the
Bonus Plan. The Compensation Committee decides the bonus amount, if any, for the Chief Executive Officer in
an executive session in which the Chief Executive Officer is not present.
Why did the Compensation Committee choose earnings per share as the secondary performance goal under the
Bonus Plan?
The Compensation Committee chose earnings per share as the secondary performance goal for fiscal 2012
because it believes that earnings per share is a significant measure of performance and is the measure most
closely aligned to long-term stockholder value.
What were the target bonus amounts established for fiscal 2012?
At a meeting held during the first quarter of fiscal 2012, the Compensation Committee reviewed the incentive
targets under the Bonus Plan for each named executive officer (other than Ms. Whalen) for fiscal 2012.
Following a review of the responsibilities of the named executive officers, the bonus targets set by our
comparable companies, the current combinations of pay elements for each named executive officer (other than
Ms. Whalen) and whether such combinations were appropriate to provide incentives for achieving desired results
for the company, the target bonuses under the Bonus Plan remained as established in 2011.
Ms. Alber’s base salary and target bonus level (together, “target total cash compensation”) result in target total
cash compensation for Ms. Alber between the 50th and 75th percentile. For the remaining named executive
officers (other than Ms. Whalen), the target total cash compensation for fiscal 2012 remained at approximately
the 75th percentile compared to the company’s proxy peer group and relevant market data as described above.
The Compensation Committee believes that delivering a greater percentage of total cash compensation through
incentive compensation reinforces the company’s pay-for-performance philosophy and aligns executive pay with
stockholder interests by limiting the growth of fixed base salaries and increasing incentive pay.
The Compensation Committee reviewed and approved the target bonus for Ms. Whalen upon her promotion to
EVP, Chief Financial Officer in July 2012. Ms. Whalen’s target total cash compensation was between the 25th
and 50th percentiles compared to the relevant market data.
The target bonuses under the Bonus Plan for fiscal 2011 and 2012 are listed below for each named executive
officer.
Named Executive Officer
Fiscal 2011
Target Bonus
(as a Percentage
of Base Salary)
Fiscal 2012
Target Bonus
(as a Percentage
of Base Salary)
Laura J. Alber ...................... 150% 150%
Julie P. Whalen(1) ................... — 70%
Patrick J. Connolly ................... 100% 100%
Richard Harvey ..................... 100% 100%
Sandra N. Stangl .................... 100% 100%
Sharon L. McCollam(2) ............... 125% —
(1) Ms. Whalen was promoted to Executive Vice President, Chief Financial Officer effective July 27, 2012.
(2) Ms. McCollam retired from the company effective March 6, 2012.
What were the results for fiscal 2012 under the Bonus Plan?
Under the stockholder-approved Bonus Plan, no amounts were payable for fiscal 2012 unless the primary
performance goal was achieved. As mentioned above, during fiscal 2012, the company achieved the primary
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