Restoration Hardware 2012 Annual Report Download - page 34

Section 162(m) generally limits the deductibility of compensation paid to our named executive officers (other
than the Chief Financial Officer) to $1 million during any fiscal year unless such compensation is “performance-
based” under Section 162(m). However, under a Section 162(m) transition rule for compensation plans or
agreements of corporations which are privately held and which become publicly held in an initial public offering,
compensation paid under a plan or agreement that existed prior to the initial public offering will not be subject to
Section 162(m) until the earliest occurrence of any of the following: (1) the expiration of the plan or agreement;
(2) a material modification of the plan or agreement; (3) the issuance of all employer stock and other
compensation that has been allocated under the plan; or (4) the first meeting of stockholders at which directors
are to be elected that occurs after the close of the third calendar year following the year of the initial public
offering (the “Transition Date”). After the Transition Date, rights or awards granted under the plan, other than
certain options and stock appreciation rights, will not qualify as “performance-based compensation” for purposes
of Section 162(m) unless such rights or awards are granted or vest upon pre-established objective performance
goals, the material terms of which are disclosed to and approved by our stockholders.
Our compensation program is intended to maximize the deductibility of the compensation paid to our named
executive officers to the extent that we determine it is in our best interests. Consequently, we may rely on the
exemption from Section 162(m) afforded to us by the transition rule described above for compensation paid
pursuant to our pre-existing plans.
Stock Ownership Guidelines
We do not require that the named executive officers maintain a minimum ownership interest in our
Company.
Compensation Tables
Summary Compensation Table
The following table shows the compensation earned by our named executive officers during fiscal 2012,
fiscal 2011, and fiscal 2010.
Name and Principal Position
Fiscal
Year Salary Bonus
Stock
Awards
Option
Awards (1)
Non-Equity
Incentive Plan
Compensation (2)
All Other
Compensation (3) Total
Carlos Alberini 2012 $1,025,000 $ — $6,712,974(6) $17,362,089 $ 279,825 $ 11,400 $25,391,288
Chief Executive Officer 2011 $ 908,462 $ — $ — $ — $1,145,195 $352,272 $ 2,405,929
2010 $ 507,692 $ — $1,922,627(7) $ — $ 531,200 $250,406 $ 3,211,925
Karen Boone (4) 2012 $ 287,250 $165,790(8) $ — $ 1,996,234 $ 39,210 $ 8,100 $ 2,496,584
Chief Financial Officer
Ken Dunaj 2012 $ 546,539 $ — $3,585,357(6) $ 668,154 $ 75,000 $ 6,000 $ 4,901,050
Chief Operating Officer 2011 $ 535,000 $ — $ — $ — $ 337,050 $ 6,000 $ 878,050
2010 $ 526,923 $ — $ — $ — $ 218,673 $ 6,000 $ 751,596
Gary Friedman (5) 2012 $1,025,000 $400,000 $9,305,599(6) $17,362,089 $ — $ 11,400 $28,104,088
Chairman Emeritus, Creator 2011 $ 995,769 $ — $ — $ — $1,249,519 $ 11,400 $ 2,256,688
and Curator (Former
Chairman and Co-
Chief Executive Officer) 2010 $ 900,000 $ — $ — $ — $ 747,000 $ 11,400 $ 1,658,400
(1) Reflects the aggregate grant date fair value of the grants of options made in fiscal 2012, computed in accordance with Financial Accounting
Standards Board Accounting Standards Codification Topic 718 (“FASB ASC 718”). See Note 12—Stock-Based Compensation to our audited
consolidated financial statements.
(2) Reflects the cash awards that our named executive officers received under our MIP for fiscal 2012, fiscal 2011, and fiscal 2010 performance, as
applicable.
(3) Reflects perquisites to the named executive officers in the form of car allowances. In addition, for fiscal 2011, the relocation benefits providedto
Mr. Alberini were in the aggregate amount of $340,872, which includes $120,000 as a housing stipend, $198,247 in moving-related expenses and
a tax adjustment “gross up” payment of $22,625.
(4) Karen Boone’s employment with our Company commenced in June 2012.
(5) On October 20, 2012, Mr. Friedman’s employment agreement was terminated and he entered into an advisory services agreement with the
Company.
26