Pier 1 2009 Annual Report Download - page 133

ITEM 6—Shareholder Proposal
William C. Thompson, Jr., Comptroller of the City of New York, as custodian and a trustee of the
New York City Employees’ Retirement System (87,157 shares owned as of December 16, 2008), the
New York City Teachers’ Retirement System (100,561 shares owned as of December 16, 2008), the New
York City Police Pension Fund (42,034 shares owned as of December 16, 2008), and the New York City
Fire Department Pension Fund (10,541 shares owned as of December 16, 2008), and as custodian of
the New York City Board of Education Retirement System (4,325 shares owned as of December 16,
2008), has submitted the following proposal in accordance with Rule 14a-8 of the Securities Exchange
Act of 1934. The proposal is substantially similar to the proposals that Mr. Thompson submitted for
consideration at the last two annual meetings of Pier 1 Imports, which were both defeated by the
shareholders. Mr. Thompson has indicated to Pier 1 Imports that each of the above entities intends to
continue to hold at least $2,000 of Pier 1 Imports’ common stock through the date of Pier 1 Imports’
annual shareholders meeting. Mr. Thompson’s address is c/o The City of New York, Office of the
Comptroller, Bureau of Asset Management, 1 Centre Street, Room 736, New York, New York
10007-2341.
To be approved, if properly presented at the meeting, the proposal must receive the affirmative
vote of a majority of the shares of common stock entitled to vote present in person or represented by
proxy at the annual meeting. If a proxy card is signed and returned but no direction is made, the
persons named in your proxy will vote your shares ‘‘AGAINST’’ this proposal. Any such shares not
voted (whether by abstention or otherwise) will have the same effect as a vote ‘‘AGAINST’’ this
proposal.
The board of directors unanimously recommends a vote ‘‘AGAINST’’ this proposal.
Shareholder Proposal:
Resolved: That the shareholders of Pier 1 Imports, Inc. (the ‘‘Company’’) request that the Board
of Director’s Executive Compensation Committee establish a pay-for-superior-performance standard in
the Company’s executive compensation plan for senior executives (‘‘Plan’’), by incorporating the
following principles into the Plan:
1. The annual incentive or bonus component of the Plan should utilize defined financial
performance criteria that can be benchmarked against a disclosed peer group of companies,
and provide that an annual bonus is awarded only when the Company’s performance exceeds
its peers’ median or mean performance on the selected financial criteria;
2. The long-term compensation component of the Plan should utilize defined performance
criteria that can be benchmarked against a disclosed peer group of companies. Options,
restricted shares, or other equity or non-equity compensation used in the Plan should be
structured so that compensation is received only when the Company’s performance exceeds its
peers’ median or mean performance on the selected performance criteria; and
3. Plan disclosure should be sufficient to allow shareholders to determine and monitor the pay
and performance correlation established in the Plan.
Supporting Statement: We feel it is imperative that compensation plans for senior executives be
designed and implemented to promote long-term corporate value. A critical design feature of a
well-conceived executive compensation plan is a close correlation between the level of pay and the level
of corporate performance relative to industry peers. We believe the failure to tie executive
compensation to superior corporate performance; that is, performance exceeding peer group
performance, has fueled the escalation of executive compensation and detracted from the goal of
enhancing long-term corporate value.
We believe that common compensation practices have contributed to excessive executive
compensation. Compensation committees typically target senior executive total compensation at the
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