Pier 1 2014 Annual Report Download - page 112

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EXECUTIVE COMPENSATION
Actions Pier 1 Imports Has Taken
In an effort to drive shareholder value creation in the short- and long-term, and in response to views expressed by shareholders,
the board of directors and compensation committee have taken the following executive compensation program actions over
previous fiscal years and for fiscal 2015:
•Renewed the CEO’s employment agreement in 2012;
•Increased the emphasis on variable, or “at risk,” compensation, which is a key driver of shareholder value creation;
•Included a relative TSR metric in CEO/NEO equity grants in fiscal 2014;
•Pier 1 Imports’ performance is measured using multiple metrics, including the addition of new performance metrics for fiscal
2015;
•Remained diligent about revisions to the executive compensation peer group by:
•Removing Blockbuster Inc., Borders Group, Inc., Charming Shoppes, Inc., Cost Plus, Inc., J. Crew Group, Inc., Jo-Ann
Stores, Inc., Liz Claiborne, Inc. and The Talbots Inc. from the peer group, and, effective for fiscal 2015, Dick’s Sporting
Goods, Inc., PetSmart, Inc., RadioShack Corporation, Ross Stores Inc. and Tuesday Morning Corporation; and
•Adding Chico’s FAS Inc., Finish Line Inc., Hhgregg, Inc., Select Comfort Corporation, Stage Stores Inc. and Ulta Salon,
Cosmetics & Fragrance, Inc., and, effective for fiscal 2015, ANN INC., DSW Inc., Haverty Furniture Companies Inc.,
Restoration Hardware Holdings, Inc. and The Container Store Group, Inc.;
•Continued to evaluate executive base salary on a case-by-case basis rather than utilizing across-the-board increases;
•Utilized negative discretion to reduce short-term incentive awards for executives when financial or operational results were
below Pier 1 Imports’ internal expectations;
•Strengthened the executive stock ownership guidelines, including increasing the CEO guideline from 5 times to 6 times base
salary (effective in fiscal 2015);
•Implemented a clawback policy that is applicable to performance-based cash and equity compensation (effective in fiscal
2015); and
•The compensation committee engaged a new outside independent compensation consultant for fiscal 2015.
Looking Forward
After hearing from its shareholders, Pier 1 Imports was pleased that many of the views expressed reinforced the actions Pier 1
Imports had either taken or was contemplating taking and which were subsequently implemented. Pier 1 Imports sets challenging
goals and although it achieved improved operations and profitable operating performance in addition to returning money to its
shareholders in fiscal 2014, Pier 1 Imports fell short of delivering the financial performance it expected and as a direct result Pier
1 Imports’ executives’ pay was diminished.
Pier 1 Imports’ feels its pay practices and programs are properly aligned with performance and encourage you to vote “Yes” on
Pier 1 Imports’ say-on-pay proposal for fiscal 2014.
34 PIER 1 IMPORTS, INC. 2014 Proxy Statement