Pier 1 2013 Annual Report Download - page 115

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Executive Compensation Components
Table 3 below explains the intended purposes and specific features of the direct compensation components of
Pier 1 Imports’ executive compensation program for fiscal 2013:
Table 3
Pay Mix
CEONEO
0%
20%
40%
60%
80%
100%
Targeted Direct Compensation
N
E
O
Base Salary STI LTI-Performance LTI-Time
12%
38%
38%
21.6%
14.4%
36%
12%
28%
Base Salary – Provides a fixed amount of compensation that is commensurate with market practices for similar
jobs and aids in attracting and retaining key executives.
Short-Term Incentives (“STI”) – A quarterly and annual performance-based cash incentive award designed to
motivate and reward executives to achieve maximum quarterly and annual financial and operational goals. The
incentive, if achieved, also aligns individual annual pay levels so that they are competitive in the marketplace.
Long-Term Incentives (“LTI”) (Performance-based and Time-based) – An equity-based incentive award
designed to motivate, reward and retain Pier 1 Imports’ executive team through long-term equity growth. Pier 1
Imports believes its executive team’s interests should be closely aligned to the long-term interests of its
shareholders, and providing a substantial portion of total compensation in the form of restricted performance-
based and time-based equity awards combined with the Pier 1 Imports stock ownership guidelines helps to
align the interests of its executive team with its shareholders.
Targeted Direct Compensation – Sum total of all the elements of the cash and equity compensation programs
provided to executive officers.
Base Salary
The aspects of individual performance that may be considered in the determination of each executive’s base
salary include the individual’s contribution to achieving operating goals, expense control and reduction,
profitability, and performance as compared to planned results. In addition, the following factors may be considered
when assessing the performance of each NEO: thought leadership (analysis, judgment, and financial acumen),
results leadership (planning and execution), people leadership (influence and execution), and personal leadership
(the ability to trust, adapt and learn). Pier 1 Imports recognizes individual experience, skill, level of responsibility
and performance over time to set base salary levels. Generally, base salary is targeted at the 50th percentile for
33