Pier 1 2016 Annual Report Download - page 91

GOVERNANCE
Committees of the Board of Directors
and Risk Oversight
The standing committees of the board of directors are the audit
committee, the compensation committee and the nominating and
corporate governance committee. Each committee functions
pursuant to a charter that is available on Pier 1 Imports’ web site
at www.pier1.com by selecting “About” on the home page and
linking through the “Investor Relations” page. The following is a
brief description of the roles and responsibilities of each
committee:
Audit Committee. The audit committee’s purpose is to:
‰assist the board of directors with oversight of:
➣the integrity of Pier 1 Imports’ financial statements,
➣Pier 1 Imports’ system of internal control,
➣Pier 1 Imports’ compliance with legal and regulatory
requirements,
➣Pier 1 Imports’ independent registered public accounting
firm’s qualifications and independence (including the hiring,
compensation and retention of such firm), and
➣the performance of Pier 1 Imports’ internal audit function;
‰prepare the audit committee report that is included in this proxy
statement; and
‰discuss the guidelines and policies governing the process by
which risk assessment and management is undertaken by Pier 1
Imports.
As part of fulfilling its role in discussing the guidelines and policies
governing the process by which risk assessment and management
is undertaken by Pier 1 Imports, the audit committee receives
periodic reports from Pier 1 Imports’ management on Pier 1
Imports’ assessment and management of identified risks. The
audit committee updates the board of directors as needed on
those risks. From time to time the entire board, another committee
of the board or a specially designated committee of the board may
assist the audit committee in this process.
Each member of the audit committee is independent pursuant to
the NYSE independence requirements. The board of directors has
determined that each member is an audit committee financial
expert, as defined by the SEC, and therefore has accounting or
related financial management expertise and is financially literate
within the meaning of NYSE listing standards.
Compensation Committee. The compensation committee’s
purpose is to:
‰develop, review, approve and modify Pier 1 Imports’
compensation philosophy as necessary to achieve Pier 1
Imports’ overall business strategies and goals, attract and retain
key executives, link compensation to organizational performance
and provide competitive compensation opportunities;
‰discharge (except to the extent otherwise governed by an
existing employment contract or other arrangement approved by
the board of directors or compensation committee) the board of
directors’ responsibilities relating to compensation of Pier 1
Imports’ non-employee directors, chief executive officer,
executive officers, and other senior officers who report directly to
Pier 1 Imports’ chief executive officer;
‰establish, oversee and administer (except to the extent
delegated in a governing plan document or otherwise) the
policies and plans that govern the components of the
compensation of those individuals, including, but not limited to,
cash, equity, short- and long-term incentives, bonus, special or
supplemental benefits, and perquisites; and
‰review periodic reports provided by management regarding
leadership continuity and organizational development and
provide input to ensure that initiatives focused on leadership
development, retention and succession planning are
successfully implemented.
The compensation committee may retain outside compensation
consulting firms to assist in the evaluation of executive officer and
non-employee director compensation, and has the authority to
obtain advice and assistance from independent legal counsel and
other compensation advisers.
The compensation committee and board of directors believe that
Pier 1 Imports’ proven success has resulted, in large part, from its
ability to successfully attract, motivate and retain a qualified
executive management team and that its future success will
depend on its ability to continue to do so. Accordingly, Pier 1
Imports’ overall compensation philosophy is to structure its
executive program to attract and retain highly skilled and
motivated individuals who will lead Pier 1 Imports to successful
performance and create shareholder value. Pier 1 Imports
accomplishes this by creating total compensation packages that
are competitive in the retail industry, fair and equitable among its
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 and short- 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,
PIER 1 IMPORTS, INC. | 2016 Proxy Statement 9