Pottery Barn 2013 Annual Report Download - page 124

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Roles in Determining Executive Compensation
The Compensation Committee makes compensation decisions related to the compensation of the Named
Executive Officers with the input and recommendations of the Chief Executive Officer (other than with respect
to her own compensation). Management provides the Compensation Committee with analyses and
recommendations developed internally with the Chief Executive Officer. The Compensation Committee reviews
these materials with its compensation consultant and considers the consultant’s advice as part of its decision-
making process, including the consultant’s advice regarding the selection of appropriate peers for inclusion in the
company’s proxy peer group. With respect to the Chief Executive Officer’s base salary, the Compensation
Committee makes a recommendation to the independent members of the Board of Directors and all independent
Directors determine any base salary adjustments.
Role of Compensation Committee
Each year, the Compensation Committee determines appropriate business targets for the fiscal year and evaluates
performance against those targets. As the Compensation Committee structures the executive compensation
program, it considers accounting and tax implications of each compensation element, as well as stockholder
dilution in the case of equity awards. The Compensation Committee updates the Board of Directors regarding
compensation decisions for executives and for the Chief Executive Officer, with the exception of adjustments to
her base salary, which are determined by the independent members of the Board, as described above. The
Compensation Committee’s role is further detailed in the Compensation Committee Charter, which is available
on the company’s website at www.williams-sonomainc.com/investors.
In making compensation decisions, the Compensation Committee reviews each executive’s past and current
compensation and analyzes each of the following:
• Each Named Executive Officer’s achievement of established financial and operating objectives for that
executive’s area of responsibility;
• The total compensation opportunity for each Named Executive Officer relative to the total compensation
opportunity disclosed by companies in the proxy peer group for the officer’s corresponding position, for
each compensation element;
• Internal positioning among the Named Executive Officers; and
• Whether the vesting schedule and value of outstanding long-term incentive awards are sufficient to
provide an appropriate balance of short and long-term incentives, drive sustained performance and
provide potential reward.
Role of Our Chief Executive Officer and Management
The Chief Executive Officer is present at Compensation Committee meetings (except when her own
compensation is being deliberated and established) and makes recommendations regarding the compensation
program in general and each executive’s compensation specifically. Her recommendations are made in the
context of peer group and other relevant data, and are based on a quantitative analysis and comparison of each
executive’s performance against fiscal year business and strategic objectives and her qualitative evaluation of
each executive’s contributions to the company’s long-term objectives. Further, she considers each executive’s
respective responsibilities and retention risk, as well as their equity position and potential for wealth
accumulation. Other members of management are also present at Compensation Committee meetings to provide
background information regarding the company’s business and strategic objectives.
Role of Independent Compensation Committee Consultant
Frederic W. Cook & Co., or Cook & Co., is the independent executive compensation consultant for the
Compensation Committee. Cook & Co. provides services only as directed by the Compensation Committee and
has no other relationship with the company. Management has reviewed the Compensation Committee’s
relationship with Cook & Co. and has identified no conflicts of interest.
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