Pier 1 2015 Annual Report Download - page 127

EXECUTIVE COMPENSATION
Long-Term Incentive
N O P ERFORMANCE -B ASED A WARDS E ARNED
As noted above, the Realized Profit for fiscal 2015 was below the threshold Profit Goal and, as a result, none of the performance-
based Profit Goal shares as described below for fiscal 2015 vested. Also, the TSR performance-based shares granted in fiscal
2013 were below threshold target levels and did not vest. Additionally, none of the outstanding performance-based shares
issued under prior fiscal year grants that were eligible to vest based on fiscal 2015 Realized Profit vested, however those shares
with respect to the fiscal 2014 and fiscal 2015 grants are eligible to vest in subsequent years under “catch-up” provisions of
those respective grants.
Pier 1 Imports believes that a blend of performance- and time-based restricted stock provides a long-term incentive opportunity
that is competitive in the retail industry, performance-focused and serves as a retention tool. During fiscal 2015, equity grants,
which aid Pier 1 Imports in executive retention, were a mix of performance-based restricted stock that utilized achievement of
three different performance measures and time-based restricted shares, which vest ratably over a three-year period. Table 6
below provides a breakdown of the restricted stock awarded to the NEOs, other than Mr. Smith, in fiscal 2015 (Ms. Coffey was
not an NEO when these equity share grants were awarded). Mr. Smith did not participate in the fiscal 2015 long-term incentive
equity award given his awards of restricted stock pursuant to his employment agreement as described below in “Chief Executive
Officer Compensation.”
Table 6
Named Executive Officer
Performance-
Based
Shares –
Profit Goal at
Target
(#)
Performance-
Based
Shares –
e-Comm sales
at Target
(#)
Performance-
Based
Shares – TSR
at Target
(#)
Time-
Based
Shares
(#)
Career
Share
Grants
(#)
Charles H. Turner 8,686 3,723 2,481 9,927 —
Michael R. Benkel 6,583 2,821 1,881 7,523 40,760
Catherine David 7,863 3,370 2,247 8,986 40,760
Sharon M. Leite 7,314 3,135 2,090 8,359 40,760
Excluding the “career share grants” described under “Executive Summary” above, approximately 60% of the shares granted at
target in fiscal 2015 were performance-based and 40% were time-based. Of that 60%, approximately 58% were based on
achievement of the Profit Goal, approximately 25% were based on e-Commerce sales and approximately 17% were based on
relative TSR. The performance-based grants are referred to as “Profit Goal performance-based shares,” “e-Commerce sales
performance-based shares,” and “TSR performance-based shares.”
The Profit Goal performance-based shares vest 33% upon Pier 1 Imports satisfying the Profit Goal established by the
compensation committee for fiscal 2015 and will vest 33% and 34% for each of the following two fiscal years, respectively, upon
Pier 1 Imports satisfying the Profit Goals established by the compensation committee for those respective fiscal years. Vesting for
each fiscal year is also conditioned upon the NEO being employed on the date of filing of Pier 1 Imports’ Annual Report on Form
10-K with the SEC for the applicable fiscal year.
The Profit Goal performance-based shares for a given fiscal year vest pursuant to the following schedule (with interpolation
between the levels), and are capped at 100%:
100% of the Profit Goal — 100% of the shares;
96% of the Profit Goal — 90% of the shares;
92% of the Profit Goal — 80% of the shares;
88% of the Profit Goal — 70% of the shares;
84% of the Profit Goal — 60% of the shares; and
80% of the Profit Goal — 50% of the shares.
Over each three-year performance (vesting) period, if the Profit Goal is not satisfied for any two consecutive fiscal years, those
performance-based shares that do not vest in the first of such two fiscal years may still vest if the sum of consecutive years’
Realized Profits equals or exceeds the sum of the individual consecutive fiscal years’ Profit Goals at the 100% level. Further, over
each three-year performance (vesting) period, if the Profit Goal is not satisfied in any fiscal year, those performance-based shares
that do not vest may still vest if the sum of the three years’ Realized Profits equals or exceeds the sum of the three individual
PIER 1 IMPORTS, INC. 2015 Proxy Statement 45