Pottery Barn 2014 Annual Report Download - page 134

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Overview of 2014 Compensation Decisions
In fiscal 2014 we continued to advance our business and strategic objectives. Our compensation decisions for
fiscal 2014 were intended to reward the achievements of fiscal 2014, drive strong performance in fiscal 2015,
provide incentives for long-term growth, and retain our key executives. These decisions included:
•Base Salaries. Certain executives received base salary increases to position them more appropriately in
light of demonstrated strong performance. The base salary of our Chief Executive Officer remained
unchanged.
•Annual Bonuses. Our Named Executive Officers earned bonus payouts ranging from 71% of target to
167% of target based on both company and individual performance for fiscal 2014. Target cash bonus
percentages for fiscal 2014 remained unchanged from fiscal 2013.
•Long-Term Incentives. We granted two forms of equity awards in fiscal 2014, restricted stock units
(RSUs) and performance stock units (PSUs). PSUs were granted for the first time in fiscal 2014 and
introduced a long-term incentive award with a variable payout based on achievement of a cumulative
three-year earnings goal. The PSUs granted in fiscal 2014 vest fully and are paid out after three years, if
at all, based on company performance. The RSUs granted in fiscal 2014 included a one-year
performance-based vesting requirement and a time-based vesting schedule of 25% per year over a four-
year period.
We believe our fiscal 2014 long-term incentive structure provides an appropriate mix of retention for our top
executive talent and at-risk incentive to drive long-term performance.
The charts below illustrate the proportion of each element of our Named Executive Officers’ and our Chief
Executive Officer’s fiscal 2014 compensation as reported in the Summary Compensation Table on page 53.
Fiscal 2014 CEO
Target Total Direct Compensation
Base
Pay
10% Annual
Incentive
15%
Long-Term
Incentive
75%
Fiscal 2014 Other NEO
Target Total Direct Compensation
(Excluding CEO)
Base Pay
21%
Annual
Incentive
21%
Long-Term
Incentive
58%
Overview of Chief Executive Officer Compensation
Since becoming Chief Executive Officer in 2010, Ms. Alber’s leadership of the company has driven year-over-
year gains in revenue, profitability, EPS and total stockholder return. The compensation of our Chief Executive
Officer is designed to pay for performance; 90% of Ms. Alber’s total compensation opportunity for fiscal 2014
was comprised of variable incentive-based compensation, which aligns with and advances stockholders’
interests. Listed below are the main elements of pay and a summary of the Compensation Committee’s decisions
related to the compensation of our Chief Executive Officer for fiscal 2014.
•Base Salary. There was no base salary change for fiscal 2014.
•Annual Bonus. Annual bonus for fiscal 2014 was paid at 167% of target, based on strong financial
performance and outstanding execution of strategic objectives.
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