Restoration Hardware 2012 Annual Report Download - page 28

EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Introduction
The following discussion and analysis of compensation arrangements of our named executive officers
identified below for fiscal 2012 should be read together with the compensation tables and related disclosures set
forth below.
We refer to the following individuals as our “named executive officers” for fiscal 2012:
• Carlos Alberini, Chief Executive Officer
• Karen Boone, Chief Financial Officer
• Ken Dunaj, Chief Operating Officer
• Gary Friedman, Chairman Emeritus, Creator and Curator (Former Chairman and Co-Chief Executive
Officer)
Our board of directors has established a compensation committee, which has been comprised of Mr. Chu and
Mr. Forrest since July 2008. Mr. Mottola was appointed to the compensation committee in May 2013. The
compensation committee is responsible for the oversight, implementation and administration of all of our executive
compensation plans and programs. For fiscal 2012, the compensation committee recommended for approval to our
board of directors all of the components of compensation for our named executive officers for fiscal 2012.
Overview of Compensation Program and Philosophy
Our compensation program is intended to support the achievement of our annual and long-term strategic
goals by attracting and rewarding employees for superior results. Such a program aligns our named executive
officers’ interests with those of the equity holders by rewarding performance that reaches or exceeds established
goals, with the ultimate objective of improving company value.
To that end, we evaluate both performance and compensation of our named executive officers to ensure that
our Company maintains its ability to attract and retain senior management.
This compensation philosophy guides the compensation committee in assessing the compensation to be paid
to our named executive officers. The compensation committee endeavors to ensure that the total compensation
paid to named executive officers is fair, reasonable and competitive, consistent with our compensation
philosophy. This compensation philosophy also guides the compensation committee as to the proper allocation
between long-term compensation, current cash compensation and short-term bonus compensation.
In determining the particular elements of compensation, the compensation committee takes into
consideration a number of factors related to our performance, such as our adjusted EBITDA and revenue growth,
as well as competitive practices among peer companies.
Role of Senior Management in Compensation Decisions
With regard to the compensation paid to each named executive officer other than our Chief Executive
Officer, we have on an annual basis reviewed with our Chief Executive Officer, Carlos Alberini the
compensation paid to each such named executive officer during the past year, and our Chief Executive Officer
has submitted to the compensation committee his recommendations regarding the compensation to be paid to
such persons during the next year. Following a review of such recommendations, the compensation committee
takes such action regarding such compensation as it deems appropriate, including either approving compensation
in an amount the compensation committee deems reasonable or submitting to the board of directors for approval
its recommendation regarding the compensation to be paid to such named executive officers. Mr. Alberini has
played a significant role in the compensation-setting process for the other named executive officers by:
• evaluating employee performance;
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