Pottery Barn 2013 Annual Report Download - page 111

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PROPOSAL 2
ADVISORY VOTE ON EXECUTIVE COMPENSATION
This is a proposal asking stockholders to approve, on an advisory basis, the compensation of our Named
Executive Officers as disclosed in this Proxy Statement in accordance with the Dodd-Frank Wall Street Reform
and Consumer Protection Act of 2010, or the “Dodd-Frank Act,” and the applicable SEC rules. This proposal is
commonly known as a “Say on Pay” proposal, and gives our stockholders the opportunity to express their views
on the compensation of our Named Executive Officers.
Compensation Program and Philosophy
As described in detail under the heading “Executive Compensation,” our executive officer compensation
program is constructed to attract, retain and motivate highly qualified personnel in support of our primary
objective of creating long-term value for stockholders, while maintaining direct links between executive pay,
individual performance, the company’s financial performance and stockholder returns. A significant portion of
individual compensation is directly dependent on the company’s achievement of financial goals, which we
believe aligns executive interests with stockholder interests and encourages long-term stockholder returns.
Fiscal 2013 Compensation Summary
To align our executive compensation packages with our executive compensation philosophy, the following
compensation actions were approved by the Compensation Committee for fiscal 2013:
•Adjustments to Base Salary: Certain executive officers received base salary increases to position them
more appropriately in light of demonstrated strong performance and increased responsibilities for fiscal
2013. The base salary of our Chief Executive Officer remained unchanged.
•Performance-Based Cash Bonus: Performance-based cash bonuses were paid for fiscal 2013 performance
as a result of the company exceeding the earnings per share goal, the achievement of positive net cash
from operating activities, and outstanding leadership and individual performance by our Named
Executive Officers.
•Performance-Based and Time-Based Equity: In fiscal 2013, our Named Executive Officers were granted
restricted stock units with both performance and service vesting criteria. The restricted stock units granted
to our Named Executive Officers in fiscal 2013 vest 25% per year over a four-year period beginning on
the grant date, in each case because positive net cash from operating activities was achieved in fiscal
2013.
In addition to the above summary, stockholders are encouraged to read the “Executive Compensation” section of
this Proxy Statement for details about our executive compensation programs, including information about the
fiscal 2013 compensation of our Named Executive Officers.
We are asking our stockholders 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 stockholders to vote “FOR” the following resolution
at the 2014 Annual Meeting:
“RESOLVED, that the company’s stockholders approve, on an advisory basis, the compensation of the
Named Executive Officers, as disclosed in the company’s Proxy Statement for the 2014 Annual Meeting of
Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission,
including the Executive Compensation, the tabular disclosure regarding such compensation and the
accompanying narrative disclosure.”
19
Proxy