Pier 1 2014 Annual Report Download - page 89

MATTERS RELATING TO CORPORATE GOVERNANCE, BOARD STRUCTURE, DIRECTOR COMPENSATION AND STOCK OWNERSHIP
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 that 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 prior to the beginning of the fiscal year
and during the first month of the fiscal 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 meeting during 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.
The compensation committee retained Pay Governance LLC as its executive compensation consultant for fiscal 2014. In its role
as executive compensation consultant to the compensation committee, Pay Governance reported directly and was accountable
to the compensation committee. Pay Governance provided market data and recommendations to the compensation committee
for fiscal 2014 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 2014, other than providing non-customized survey data used by management to evaluate employee compensation.
As part of its review of executive compensation practices during the fiscal year, the compensation committee performed a
request for proposals process for executive compensation consulting services for the compensation committee. In January
2014, the compensation committee retained Towers Watson as its executive compensation consultant for fiscal 2015.
In compliance with SEC and NYSE requirements regarding the independence of compensation consultants, each of Pay
Governance and Towers Watson provided the compensation committee with letters confirming its independence and the
independence of their respective 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 2014 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 pursuant to the NYSE independence requirements.
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 corporate governance matters, including the Pier 1 Imports, Inc. Corporate Governance Guidelines
described above under the caption “Matters Relating to Corporate Governance, Board Structure, Director Compensation and
Stock Ownership.” Each member of the nominating and corporate governance committee is independent pursuant to the NYSE
independence requirements.
PIER 1 IMPORTS, INC. 2014 Proxy Statement 11