Pier 1 2011 Annual Report Download - page 114

Download and view the complete annual report

Please find page 114 of the 2011 Pier 1 annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 144

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144

• increasing the payout for maximum performance under our short-term incentive cash awards to
200% from 150% of target; and
• maintaining current executive officer base salary levels with only a slight increase in one named
executive officer’s base salary.
Compensation Policies, Principles, Objectives and Practices
Pier 1 Imports’ proven success and continuation of that success depends, in large part, on our ability to
successfully attract, motivate and retain a qualified management team. Sourcing qualified candidates to fill
important positions within Pier 1 Imports is challenging given the highly competitive retail environment.
Accordingly, Pier 1 Imports’ overall compensation philosophy is that our executive compensation plan should be
structured to attract and retain highly skilled and motivated individuals who will lead Pier 1 Imports to successful
performance that is consistent with shareholders’ expectations. Pier 1 Imports accomplishes this by creating total
compensation packages which are competitive in the retail industry, fair and equitable among the executives, and
which provide strong incentives for the long-term success and performance of Pier 1 Imports.
Pier 1 Imports provides both short-term and long-term incentives to our executives for the effective
management of major functions, teamwork, and effective expense control. Success on these fronts leads to the
overall success of Pier 1 Imports. Pier 1 Imports believes that as an executive’s level of responsibility increases, a
greater portion of that executive’s potential total compensation should come from performance-based plans. This
aligns management’s interests with shareholders’ interests as the executive’s potential total compensation will only
increase when Pier 1 Imports’ performance improves.
Pier 1 Imports generally targets total compensation packages for executive officers at the 50th percentile of Pier
1 Imports’ peer group when Pier 1 Imports achieves planned financial and operational goals. Pier 1 Imports designs
its total compensation packages to provide pay above the 50th percentile of pay compared to its peer group when
Pier 1 Imports’ results significantly exceed planned financial and operational goals.
At the beginning of 2011, Pier 1 Imports used a group of peer companies to benchmark short-term incentive
and long-term incentive elements of total compensation and non-employee director compensation. The peer group
included the following companies which at that time were publicly traded and were direct competitors, retail
industry competitors, and/or local area competitors for executive talent:
• Bed Bath & Beyond Inc.
• Blockbuster Inc.
• Borders Group, Inc.
• Charming Shoppes, Inc.
• Cost Plus, Inc.
• Dick’s Sporting Goods, Inc.
• Fossil, Inc.
• J.Crew Group, Inc.
• Jo-Ann Stores, Inc.
• Kirkland’s, Inc.
• Liz Claiborne, Inc.
• PetSmart, Inc.
• RadioShack Corporation
• Ross Stores, Inc.
• Stein Mart, Inc.
• Tuesday Morning Corporation
• Williams-Sonoma, Inc.
• Zale Corporation
Data for these companies was provided by Towers Watson & Co., the compensation committee’s executive
compensation consultant at that time.
30