Pier 1 2016 Annual Report Download - page 104

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COMPENSATION
‰Effective with fiscal 2017, reducing the weighting of the three-year Profit Goal-based awards and adding a return on invested
capital performance metric to our long-term incentive plan.
‰Incorporating a TSR modifier for all performance-based equity awards to NEOs, effective with the fiscal 2017 grants, including a
feature that requires positive TSR for any upward enhancement.
In Conclusion.The compensation committee will continue to seek and respond to shareholder views on executive compensation,
practice good corporate governance with regards to executive pay and assure alignment of executive pay and performance at Pier 1
Imports. We recognize that the executive compensation landscape is evolving and we must evolve with it to ensure that the CEO’s
compensation is both contemporary and in alignment with the good practices in place for our other executives. For 2017, key
provisions of the CEO’s employment agreement that may have been considered unfavorable by shareholders, including the
performance “catch up” provisions applicable to long-term incentive, have been effectively eliminated because the CEO did not
accept an equity award. In the year ahead we will continue to focus on further conforming the CEO’s pay to the pay for performance
program in place for his executive team.
Fiscal 2016 Business Highlights
Some of Pier 1 Imports’ fiscal 2016 accomplishments are highlighted below:
‰Net sales grew 0.4% to $1.892 billion (or growth of 1.4% on a constant currency basis) (1);
‰Company comparable sales grew 0.7% (or growth of 1.7% on a constant currency basis) (1);
‰E-Commerce sales penetration grew to 16% of net sales, up from 11% penetration the prior year;
‰Delivered gross profit of $705 million, or 37.3% of net sales, and operating income of $75.2 million, or 4.0% of net sales;
‰Achieved a year-over-year reduction in inventories of approximately 15%;
‰Generated cash from operations totaling $164 million;
‰Distributed $23.7 million to shareholders through $0.07 per share quarterly cash dividends; and
‰Utilized $75 million to repurchase approximately 8.3% of Pier 1 Imports’ outstanding common stock.
(1) This proxy statement references net sales and company comparable sales on a constant currency basis, which are calculated by translating the current and prior periods into comparable amounts using
the same foreign exchange rate. Management believes this non-GAAP financial measure is useful when comparing sales results between periods when foreign exchange rates are volatile.
22 PIER 1 IMPORTS, INC. | 2016 Proxy Statement