Pier 1 2015 Annual Report Download - page 124

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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, including both informal and formal views by
shareholders, the board of directors and compensation committee have taken the following actions with respect to Pier 1
Imports’ executive compensation program over previous fiscal years and for fiscal 2015:
•Eliminated the “catch-up” feature in performance-based equity awards for fiscal 2016 grants, other than the CEO, whose
long-term equity awards are governed by his employment agreement;
•Increased the vesting period for profit goal performance-based equity awards granted in fiscal 2016 to three year cliff-vesting,
other than the CEO, whose long-term equity awards are governed by his employment agreement;
•Revised the peer group to include companies more aligned with Pier 1 Imports in terms of revenue and/or operating
characteristics;
•Implemented a clawback policy that is applicable to performance-based cash and equity compensation;
•Included a relative TSR metric in CEO/NEO equity grants;
•Engaged a new outside independent compensation consultant to assist the compensation committee for fiscal 2015;
•Utilized multiple metrics to assess performance, including the addition of new performance metrics for both short- and long-
term incentives for fiscal 2015;
•Strengthened the executive stock ownership guidelines, including increasing the CEO guideline from 5 times to 6 times base
salary;
•Increased the emphasis on variable, or “at risk,” compensation, which is a key driver of shareholder value creation; and
•Continued to evaluate executive salaries on a case-by-case basis rather than utilizing across-the-board increases.
Looking Forward
Pier 1 Imports believes that the above actions reinforce the views of its shareholders with respect to executive compensation
practices. 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 2015, Pier 1 Imports fell short of delivering the financial
performance it expected and as a direct result Pier 1 Imports’ executives’ pay was diminished.
The board of directors believes Pier 1 Imports’ pay practices and programs are properly aligned with performance and
encourages you to vote “Yes” on Pier 1 Imports’ say-on-pay proposal for fiscal 2015.
42 PIER 1 IMPORTS, INC. 2015 Proxy Statement