Pottery Barn 2014 Annual Report Download - page 123

PROPOSAL 3
ADVISORY VOTE TO APPROVE 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 2014 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 2014:
•Adjustments to Base Salary: Certain executive officers received base salary increases in light of
demonstrated strong performance. The base salary of our Chief Executive Officer remained unchanged.
•Performance-Based Cash Bonus: Performance-based cash bonuses were paid for fiscal 2014 performance in
alignment with the company’s 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 2014, our Named Executive Officers were granted
performance stock units (PSUs) with variable payout based on a three-year performance metric and
restricted stock units (RSUs) with both performance and service vesting. The PSUs granted in fiscal 2014
vest 100% after three years based upon achievement of pre-established earnings goals. The RSUs granted
in fiscal 2014 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 2014.
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 2014 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 2015 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 2015 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.”
Required Vote for this Proposal
To approve this proposal, a majority of voting power entitled to vote thereon, present in person or represented by
proxy, at the Annual Meeting must vote “FOR” this proposal.
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Proxy