Pottery Barn 2013 Annual Report Download - page 127

Base Salary
In March 2013, the Compensation Committee reviewed and set the fiscal 2013 base salaries of our Named
Executive Officers based on overall company performance and performance relative to our proxy peer
companies, an analysis of each executive’s position relative to executives in our proxy peer group, other market
data, each executive’s experience (as well as past, current and anticipated contributions to the company’s
success), and the Chief Executive Officer’s recommendations (other than with respect to her own base salary).
Following review, Ms. Whalen’s base salary was increased by $50,000 to more appropriately position her against
the relevant market data, and Ms. Stangl’s base salary was increased by $200,000 to reflect the increase in size
and scope of her role as President of all Pottery Barn brands.
In executive session at a meeting in March 2013, without the Chief Executive Officer present, the Compensation
Committee reviewed Ms. Alber’s base salary. The Compensation Committee concluded that Ms. Alber’s base
salary would remain unchanged for fiscal 2013, that her base salary was positioned competitively and that her
additional compensation opportunities should be earned in the form of incentive compensation.
The following table shows the fiscal 2012 and fiscal 2013 base salaries for the Named Executive Officers.
Named Executive Officer Fiscal 2012 Base Salary Fiscal 2013 Base Salary
Laura J. Alber ................................. $1,300,000 $1,300,000
Julie P. Whalen ................................ $ 550,000 $ 600,000
Sandra N. Stangl ............................... $ 800,000 $1,000,000
Janet M. Hayes(1) .............................. $ — $ 760,000
Patrick J. Connolly ............................. $ 643,750 $ 643,750
(1) Ms. Hayes became a Named Executive Officer for the first time in fiscal 2013.
Annual Bonus
Cash bonuses are awarded to our Named Executive Officers under the 2001 Incentive Bonus Plan, the Bonus
Plan, and paid only when established company and business objectives are met or exceeded.
At the beginning of each fiscal year, the Compensation Committee reviews and establishes individual bonus
targets for each Named Executive Officer and threshold, target and maximum EPS goals under the Bonus Plan
which determine the funding pool from which executive bonuses are paid.
In addition, the Compensation Committee sets a primary performance goal that must be achieved, which
establishes the maximum bonus payable under the Bonus Plan to each Named Executive Officer subject to the
Compensation Committee’s discretion to reduce such amount. For fiscal 2013, this goal was positive net cash
flow provided by operating activities as provided on the company’s consolidated statements of cash flows. This
primary goal was met in fiscal 2013, and the Compensation Committee used negative discretion to determine the
actual payout to each Named Executive Officer based on achievement of the EPS goal and each individual’s
performance, as described below.
Fiscal 2013 Bonus Targets
At a meeting held in March 2013, the Compensation Committee reviewed the bonus targets under the Bonus Plan
for each Named Executive Officer. The Compensation Committee considered the recommendations of the Chief
Executive Officer, which were informed by the following factors:
• Each executive’s respective responsibilities;
• The bonus targets set by our proxy peers;
• The relationship of the bonus target to other compensation elements; and
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Proxy