Pottery Barn 2014 Annual Report Download - page 139

Components of Our Compensation Program, 2014 Decisions and the Decision-Making Process
Our compensation program for our Named Executive Officers is made up of the four components listed below,
which are designed to create long-term value for stockholders and to attract, motivate and retain outstanding
executives.
Compensation Component Purpose
Base Salary • Provides a minimum level of fixed compensation to induce executives to join
and remain with the company.
Annual Cash Bonus • Motivates and rewards achievement toward our annual business and strategic
objectives with cash that varies based on results.
Long-Term Incentives (e.g.
equity compensation awards)
• Encourage our executive team to work toward the company’s long-term
growth, provide variable payout opportunities that reward the creation of
sustained and long-term earnings growth and stockholder value, and offer
meaningful incentives to remain with the company.
Benefits • Enhance our compensation program with significant and market-competitive
health, welfare, financial and retirement benefits.
Base Salary
In March 2014, the Compensation Committee reviewed and set the fiscal 2014 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, the base salaries of the Named Executive Officers other than the Chief Executive Officer were
increased in light of demonstrated strong performance.
In executive session at a meeting in March 2014, 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 2014, 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 2013 and fiscal 2014 base salaries for the Named Executive Officers.
Named Executive Officer Fiscal 2013 Base Salary Fiscal 2014 Base Salary
Laura J. Alber ................................. $1,300,000 $1,300,000
Julie P. Whalen ................................ $ 600,000 $ 700,000
Sandra N. Stangl ............................... $1,000,000 $1,100,000
Janet M. Hayes ................................ $ 760,000 $ 900,000
Patrick J. Connolly ............................. $ 643,750 $ 700,000
Annual Cash Bonus
Cash bonuses are awarded to our Named Executive Officers under the 2001 Incentive Bonus Plan, or 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
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