Pier 1 2012 Annual Report Download - page 92

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Committees of the Board of Directors and Risk Oversight
The standing committees of the board of directors are the audit committee, the compensation committee, and
the nominating and corporate governance committee. The board of directors may from time-to-time designate an
executive committee. A brief description of each committee’s functions follows:
Audit Committee. The audit committee’s purpose is to:
• assist the board of directors with oversight of:
➣the integrity of Pier 1 Imports’ financial statements,
➣Pier 1 Imports’ system of internal control,
➣Pier 1 Imports’ compliance with legal and regulatory requirements,
➣Pier 1 Imports’ independent registered public accounting firm’s qualifications and
independence, and
➣the performance of Pier 1 Imports’ internal audit function and independent registered public
accounting firm (including the hiring, compensation and retention of such firm);
• prepare the audit committee report that is included in this proxy statement; and
• discuss the guidelines and policies governing the process by which risk assessment and management
is undertaken by Pier 1 Imports.
As part of fulfilling its role in discussing the guidelines and policies governing the process by which risk
assessment and management is undertaken by Pier 1 Imports, the audit committee receives periodic reports from
Pier 1 Imports’ management on Pier 1 Imports’ assessment and management of identified risks. The audit
committee updates the board of directors as needed on those risks. From time-to-time the entire board, another
committee of the board or a specially designated committee of the board may assist the audit committee in this
process.
Each member of the audit committee is independent and the board of directors has determined that each
member is an audit committee financial expert, as defined by the SEC, and therefore has accounting or related
financial management expertise and is financially literate within the meaning of NYSE listing standards.
Compensation Committee. The compensation committee’s purpose is to:
• develop, review, approve and modify Pier 1 Imports’ compensation philosophy as necessary to
achieve Pier 1 Imports’ overall business strategies and goals, attract and retain key executives, link
compensation to organizational performance, and provide competitive compensation opportunities;
• discharge (except to the extent otherwise governed by an existing employment contract or other
arrangement approved by the board of directors or compensation committee) the board of directors’
responsibilities relating to compensation of Pier 1 Imports’ non-employee directors, chief executive
officer, executive officers, and other senior officers who report directly to Pier 1 Imports’ chief
executive officer;
• establish, oversee and administer (except to the extent delegated in a governing plan document or
otherwise) the policies and plans that govern the components of the compensation of those
individuals, including, but not limited to, cash, equity, short- and long-term incentive, bonus, special
or supplemental benefits, and perquisites; and
• receive a report from Pier 1 Imports’ management regarding succession planning, and the
development and retention of executive management talent to ensure leadership continuity and
organizational strength to achieve Pier 1 Imports’ business strategies and goals.
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