Pottery Barn 2013 Annual Report Download - page 118

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EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
This Compensation Discussion and Analysis describes our compensation program, the compensation decisions
we made under our program, and the reasoning underlying those decisions. This discussion and analysis focuses
on the compensation of our “Named Executive Officers,” who in fiscal 2013 were:
Laura J. Alber Director, President and Chief Executive Officer
Julie P. Whalen Executive Vice President, Chief Financial Officer
Sandra N. Stangl President, Pottery Barn Brands
Janet M. Hayes President, Williams-Sonoma Brand
Patrick J. Connolly Director and Executive Vice President, Chief Marketing Officer
Compensation Discussion and Analysis – Executive Summary
Our compensation decisions begin with the objective of paying for performance. Our stockholders cast a
substantial vote in favor of our 2012 executive compensation at our 2013 Annual Meeting of Stockholders. Our
fiscal 2013 financial performance was significantly above fiscal 2012 levels (including record net revenues in
fiscal 2013). For fiscal 2013, the Compensation Committee took the following steps to continue to align
executive pay with company performance.
• We did not change the base salary of our Chief Executive Officer to increase the emphasis on the
performance-based components of her compensation.
• Except in the case of our Chief Financial Officer, we set target cash bonus percentages at the same levels
as fiscal 2012, notwithstanding an 8.5% increase in fiscal 2013 target earnings per share as compared to
fiscal 2012 actual earnings per share.
• The Compensation Committee awarded cash bonuses ranging from 117% to 180% of target to our Named
Executive Officers in light of our fiscal 2013 performance, as described below.
• 87% of the total target compensation of our Chief Executive Officer was based on company performance.
• The stock ownership guideline for the Chief Executive Officer was increased from three times base salary
to five times base salary.
In addition to actual results, our perspective is that performance includes how we achieve those results. Our
company values guide the way we think and approach our business, and we measure executive performance with
respect to these values as we make compensation decisions. This assessment is reflected in the compensation
recommendations that our Chief Executive Officer makes to the Compensation Committee with respect to the
other Named Executive Officers and the Compensation Committee’s decisions with respect to the compensation
of our Chief Executive Officer.
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