Pier 1 2015 Annual Report Download - page 123

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EXECUTIVE COMPENSATION
Peer Group
For fiscal 2015, Pier 1 Imports used a group of peer companies to benchmark base salary, short- and long-term incentive
elements of total executive compensation. The peer group included the following companies, which at that time were publicly
traded and were direct competitors, retail industry competitors, and/or local area competitors for executive talent:
Added For 2015 2015 Peer Group Removed For 2015
ANN INC. ANN INC.
Bed Bath & Beyond Inc.
Chico’s FAS Inc.
DSW Inc. DSW Inc.
Finish Line Inc.
Fossil, Inc.
Dick’s Sporting Goods, Inc.
Haverty Furniture Companies, Inc. Haverty Furniture Companies, Inc.
hhgregg, Inc.
Kirkland’s, Inc. PetSmart, Inc.
Restoration Hardware Holdings, Inc. Restoration Hardware Holdings, Inc.
Select Comfort Corporation
Stage Stores Inc.
Stein Mart, Inc.
RadioShack Corporation
Ross Stores, Inc.
The Container Store Group, Inc. The Container Store Group, Inc.
Ulta Salon, Cosmetics & Fragrance, Inc.
Williams-Sonoma, Inc.
Zale Corporation
Tuesday Morning Corporation
These companies were chosen to comprise Pier 1 Imports’ group of peer companies because their revenues and/or operating
characteristics are considered by the compensation committee to be consistent with those of Pier 1 Imports.
Data for these companies was provided by Towers Watson, the compensation committee’s independent executive
compensation consultant for fiscal 2015. Towers Watson provided information and consulting to the compensation committee on
a variety of executive compensation issues including base salaries, short-term incentive pay, long-term incentive pay and plan
design for short-term (cash) and long-term (equity) incentive programs. Towers Watson also provided data from the Towers
Watson 2013 Compensation Data Bank (CDB) Retail/Wholesale Services Executive Database in order to provide additional
information relating to total compensation, cash compensation and equity trends in the broader retail industry to ensure that Pier
1 Imports maintains competitive compensation practices and packages across the broader retail group.
Advisory Vote on Executive Compensation; Shareholder Engagement Efforts
Pier 1 Imports has determined that its shareholders should vote on a say-on-pay proposal each year, consistent with the
preference expressed by its shareholders at the 2011 annual meeting of shareholders.
Pier 1 Imports conducted an advisory vote on executive compensation at its 2014 annual meeting of shareholders. While this
vote was not binding on Pier 1 Imports, its board of directors or its compensation committee, Pier 1 Imports believes that it is
important for its shareholders to have an opportunity to vote on this proposal on an annual basis as a means to express their
views regarding Pier 1 Imports’ executive compensation philosophy, its compensation policies and programs, and its decisions
regarding executive compensation, all as disclosed in the proxy statement. Pier 1 Imports’ board of directors and its
compensation committee value the opinions of Pier 1 Imports’ shareholders and the compensation committee will consider
shareholder input and will evaluate whether any actions are necessary to address shareholder concerns.
At the 2014 annual meeting of shareholders, approximately 96% of the votes represented at the meeting and entitled to vote on
the advisory vote on executive compensation approved Pier 1 Imports’ NEO compensation as disclosed in the proxy statement.
Pier 1 Imports continued the enhanced shareholder engagement program it began in fiscal 2014 and the board of directors and
management engaged in a series of substantial discussions and deliberations about Pier 1 Imports’ compensation philosophy
and executive compensation practices, exploring further changes to the program. The board of directors encouraged
management to continue to expand its engagement with shareholders to better understand their views on Pier 1 Imports’
executive compensation practices.
Management reached out to shareholders representing approximately 70% of the shares of Pier 1 Imports common stock to
seek their input and feedback on Pier 1 Imports’ executive compensation practices. The outreach efforts led to informal
commentary from several shareholders noting their satisfaction with Pier 1 Imports’ executive compensation practices. No
specific recommendations were obtained from the outreach program.
PIER 1 IMPORTS, INC. 2015 Proxy Statement 41