Pier 1 2013 Annual Report Download - page 93

The compensation committee may retain outside compensation consulting firms to assist in the evaluation of
executive officer and non-employee director compensation, and has the authority to obtain advice and assistance
from internal or external legal, accounting and other consultants.
The compensation committee and board of directors believe that Pier 1 Imports’ proven success and
continuation of that success depends, in large part, on its ability to successfully attract, motivate and retain a
qualified executive management team. Accordingly, Pier 1 Imports’ overall compensation philosophy is that its
executive program 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 provide strong incentives for the long-term success and performance of Pier 1
Imports. The compensation committee will continue to administer and develop Pier 1 Imports’ compensation
programs in a manner designed to achieve these objectives. The compensation committee also believes that the total
compensation opportunity provided for the executive officers must be evaluated against the compensation of
comparable peer group companies.
Base salary, short-term incentive and long-term incentive compensation recommendations for the executive
officers are typically presented to the compensation committee at one or more of the committee’s meetings in January,
February and March of each year. The presentations include recommendations by Pier 1 Imports’ chief executive
officer, human resources compensation group, or both, on those elements of compensation, plus recommended plan
design changes, if any, and a summary of all proposed awards to all eligible levels of management. The presentations
may also include survey data from a peer group of retail companies for the compensation committee’s consideration
along with studies and recommendations from outside consultants. At the March meeting (which is the first month of
the fiscal year) the compensation committee and board of directors consider for approval the fiscal year compensation
with a targeted effective date in April. Implementation of any equity grant or other incentive plan compensation for the
year occurs after board of directors and compensation committee approvals.
During fiscal 2013, the compensation committee retained Pay Governance LLC as its executive compensation
consultant. In its role as executive compensation consultant to the compensation committee, Pay Governance
reported directly and was accountable to the compensation committee. For fiscal 2013, Pay Governance provided
market data and recommendations to the compensation committee regarding base salary, short-term incentive and
long-term incentive elements of total executive compensation. The market data was from a peer group of specialty
retailers, all of which were publicly traded at the time the market data was provided, in addition to data provided by
the 2012 Towers Watson Retail/Wholesale Survey. The total fees paid to Pay Governance for the fiscal year were
less than $120,000. Pay Governance did not provide any other services to Pier 1 Imports during fiscal 2013, other
than non-customized survey data information.
In compliance with the SEC and NYSE disclosure requirements regarding the independence of compensation
consultants, Pay Governance provided the compensation committee with a letter addressing each of the six
independence factors. Their response affirms the independence of Pay Governance and their partners, consultants
and employees who advise the compensation committee on executive compensation matters.
In addition to the compensation committee consultant described above, Pier 1 Imports’ management may, from
time to time, retain an outside consultant for assistance and guidance in the formulation of new compensation
programs and retirement plans and the modification of existing compensation programs and retirement plans. For
fiscal 2013 Pier 1 Imports’ management did not retain an outside consultant to recommend the amount or form of
executive or non-employee director compensation.
Each member of the compensation committee is independent.
Nominating and Corporate Governance Committee. The nominating and corporate governance committee is
responsible for considering and making recommendations to the board of directors regarding nominees for election
to the board of directors and the membership of the various board of directors’ committees. The nominating and
corporate governance committee is also responsible for overseeing the Pier 1 Imports, Inc. Corporate Governance
Guidelines described earlier in this proxy statement and other corporate governance matters. Each member of the
nominating and corporate governance committee is independent.
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