Pier 1 2013 Annual Report Download - page 108

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EXECUTIVE COMPENSATION
Compensation Committee Report
The compensation committee has reviewed and discussed with management the Compensation Discussion and
Analysis below. Based on the review and discussion, the compensation committee has recommended to the board of
directors that the Compensation Discussion and Analysis be included in Pier 1 Imports’ 2013 proxy statement.
COMPENSATION COMMITTEE
John H. Burgoyne, Chairman
Cheryl A. Bachelder
Brendan L. Hoffman
Terry E. London
Compensation Discussion and Analysis
The purpose of this Compensation Discussion and Analysis disclosure is to provide material information about
Pier 1 Imports’ compensation policies, principles, objectives and practices for its named executive officers (“NEO”)
for fiscal 2013 and to put into perspective the tabular disclosures and related narratives that follow it.
Executive Summary
The executive officers’ decisions and leadership over the past five years, even throughout the worst
recessionary business climate in recent history, positioned Pier 1 Imports to achieve significantly improved and
profitable operating performance in fiscal 2013. Detailed below are key business achievements during fiscal 2013,
an overview of Pier 1 Imports’ executive compensation philosophy and some highlights of Pier 1 Imports’ executive
compensation program in fiscal 2013.
F
ISCAL
2013 B
USINESS
R
ESULTS
H
IGHLIGHTS
:
• delivered a 7.5% annual comparable store sales increase resulting primarily from increases in traffic
and average ticket in addition to delivering a 9.5% annual comparable store sales increase in fiscal
2012;
• delivered gross profit of 43.6% of fiscal 2013 sales that surpassed last year’s gross profit of 42.5% of
fiscal 2012 sales;
• limited selling, general and administrative expenses to 30.1% of fiscal 2013 sales, an improvement
over last year’s selling, general and administrative expenses of 31.0% of fiscal 2012 sales;
• delivered annual operating income of $199.0 million, or 11.7% of fiscal 2013 sales, a 28.6%
improvement over last year’s operating income of $154.8 million, or 10.1% of fiscal 2012 sales;
• maintained a strong balance sheet at year-end with $231.6 million in cash, inventory of $356.1
million, a 10.4% increase compared to fiscal 2012 year-end inventory, and $9.5 million in long-term
debt;
• returned value to shareholders through a $0.04 quarterly cash dividend, which commenced in April
2012, and was subsequently increased by 25% to $0.05 per share in December 2012; approximately
$18.0 million was paid in quarterly cash dividends during fiscal 2013;
• completed a $100 million share repurchase program in December 2012, repurchasing approximately
5.3% of Pier 1 Imports’ outstanding common stock, which followed another $100 million share
repurchase program completed in September 2011;
• authorized a new $100 million share repurchase program in December 2012 , all of which remained
available for repurchase at the end of fiscal 2013;
26