2018 Guide to Effective Proxies

2.9 Board diversity graphics | 151 6 TH EDITION | GUIDE TO EFFECTIVE PROXIES PIER 1 IMPORTS, INC. POPULAR, INC. PROLOGIS PRUDENTIAL FINANCIAL, INC. GOVERNANCE Nominees for Director Thenominatingandcorporategovernancecommitteebelievestheninenomineespossesstheprimaryqualitiesandcharacteristics thatitlooksforinnomineesfordirector.Thespecificexperiences,qualifications,attributesandskillsofeachindividualwhichsupport herorhisnominationareincludedintheindividualdiscussionsbelow.Thefollowingillustrationsshowtheaverageage,average tenure(asofMay16,2018),andgenderbreakdownforthegroupofnomineeswithcomparisonstotheCompany’speergroupfor executivecompensationpurposesandcompaniesintheS&P500. DirectorTenure 5.8 Pier 1 9 Peers 9 S&P 500 DirectorAges Pier 1Average: 59.1 S&P500 Average:63 49 60 61 63 62 64 65 66 67 GenderDiversity: 33.33% 3of9Directors areWomen S&P 500Average: 23% PeerAverage: 34% Peer Average: 62.5 68 47 48 Theboardofdirectorsunanimouslyrecommendsavote“For”theelectionofeachofthefollowingnomineesasadirector. CLAIREH.BABROWSKI Ms.Babrowskibringstotheboardexperienceinkeyleadershiprolesin leadingglobalanddomesticmulti-unitretailcompanies.Shepossesses significantexperienceinoperations,financeandinternationalandgeneral management,aswellasglobalexposure. DirectorSince: 2011 Age: 60 Committees: Audit,Compensation Š RetailExecutiveExperience: Ms.BabrowskimostrecentlyservedasexecutivevicepresidentandchiefoperatingofficerofToys“R”Us,Inc.from2007to2010.From2005 to2006,Ms.BabrowskiworkedforRadioShackCorporationservingasexecutivevicepresidentandchiefoperatingofficer,andthenpresident, chiefoperatingofficerandactingchiefexecutiveofficer,overseeingRadioShack’sglobaloperationsandmarketingandbranding.Shebegan hercareeratMcDonald’sCorporation,spending30yearsinvariousroles,includingdirectresponsibilityforMcDonald’sAsiaPacific,Middle EastandAfricaoperations,andeventuallyservingasseniorexecutivevicepresidentandchiefrestaurantoperationsofficer. Š DirectorExperience: From2006to2016Ms.Babrowskiservedasadirector,auditcommitteememberandnominatingandcorporategovernancecommittee memberofDelhaizeGroup,aBelgiancompanywhoseAmericanDepositoryReceiptsaretradedontheNYSEandwhoseordinarysharesare tradedontheNYSEEuronextinBrussels.WhileatDelhaize,Ms.Babrowskiservedonseveraladhocboardcommitteeswhichconsideredfrom timetotimevarioustransactions.Ms.BabrowskipreviouslyservedasadirectorandchairmanofChipotleMexicanGrill,Inc.Shealso previouslyservedontheboardofmanagersofQCEFinanceLLC,whichistheultimateparentcompanyofQuiznos,fromFebruary2012 throughMay2014,includingservingasthechairofitsoperationsanddevelopmentcommitteeandservingonthemarketingcommittee. 4 PIER1IMPORTS,INC. | 2018ProxyStatement BOARDDIVERSITY The Corporate Governance and Nominating Committee does not have a specific diversity policy with respect to the director nomination process. Rather, the Committee considers diversity in the broader sense of how a candidate’s viewpoints, experience, skills, background and other demographics could assist the Board in light of the Board’s composition at the time. The Board believes that each director contributes to the overall diversity by providing a variety of personal and professional experiences and backgrounds. The Board believes that, as shown below, the current directors and nominees reflect an appropriate diversity of gender, age, race, geographical background and experience and are committed to considering diversity issues inevaluatingthecompositionoftheBoard. 80% are female or ethnically diverse 1 is African- American 1 is Asian 6 are Hispanic 2 are women Independence Age Tenure 80% Independent (alldirectors are independent except theExecutive Chairman and thePresident andCEO) 46-50 51-55 56-60 61-65 66-70 0-5 YearsofService 6-10 11-15 Average tenure:9.2 yrs. RetirementAge: 72 AverageAge:57 >15 6 4 2 0 DIRECTORS’EXPERIENCEANDSKILLS Themainskillsandexperience ofourdirectornomineesarepresented below: GlobalBusiness Experience SeniorManagement andLeadership Experience BusinessOperation Experience Financial,Investment andM&A AuditandRisk Oversight Experience FinancialExpertise/ Literacy MarketingandMedia Communications Telecommunications TechnologySystems Experience PublicCompany Governance Experience DistributionandSales Knowledgeand Understanding of Popular’sMain Markets 80%arefemaleorethnicallydiverse1isAfrican-American6areHispanic1isAsian2arewomenTenureYearsofService0-56-1011-15>15Averagetenure:9.5yrs.Independence80%Independent(alldirectorsareindependentexcepttheExecutiveChairmanandtheCEOandPresident)AgeRetirementAge:72AverageAge:57024646-5051-5556-6061-6566-70 14 | 2018PROXYSTATEMENT Item 1–Election of Directors Our Board of Directors has nominated 12 directors for election at this Annual Meeting to hold office until the next annual meeting and the election of their successors. All of the nominees are currently directors. Each agreed to be named in this Proxy Statement and to serve if elected. All of the nominees are expected to attend the 2018 Annual Meeting. All 12 directors attended the 2017 Annual Meeting. Wehavenoreasontobelievethatanyofthenomineeswillbeunableorunwillingforgoodcausetoserveifelected.However,if anynomineeshouldbecomeunableforanyreasonorunwillingforgoodcausetoserve,proxiesmaybevotedforanotherperson nominatedasasubstitutebytheBoard,ortheBoardmayreducethenumberofdirectors. Director Criteria, Qualifications, Experience and Tenure PrudentialFinancialisafinancialservicescompanythatoffersavarietyofproductsandservices,includinglifeinsurance, annuities,retirement-relatedservices,mutualfunds,andinvestmentmanagement.TheCorporateGovernanceandBusiness EthicsCommitteeperformsanassessmentoftheskillsandtheexperienceneededtoproperlyoverseetheinterestsofthe Company.Generally,theCommitteereviewsboththeshort-andlong-termstrategiesoftheCompanytodeterminewhatcurrent andfutureskillsandexperiencearerequiredoftheBoardinexercisingitsoversightfunction.TheCommitteethencompares thoseskillstotheskillsofthecurrentdirectorsandpotentialdirectorcandidates.TheCommitteeconductstargetedeffortsto identifyandrecruitindividualswhohavethequalificationsidentifiedthroughthisprocess,keepinginminditscommitmentto diversity. BOARD HIGHLIGHTS BOARD DIVERSITY WhiletheCompanydoesnothaveaformalpolicyon Boarddiversity,ourCorporateGovernancePrinciples andPracticesplacegreatemphasisondiversity,and theCommitteeactivelyconsidersdiversityin recruitmentandnominationsofdirectors.Thecurrent compositionofourBoardreflectsthoseeffortsandthe importanceofdiversitytotheBoard: • Two-thirdsofourBoardisdiverse • 80%ofournon-employeedirectorsarediverse 4 directornomineeshave workedoutside theUnitedStates 2 directornomineesare African-American 1 directornomineeis Asian-American 2 directornomineesare Hispanic 3 directornomineesare Women 1 directornomineeis LGBT 12 Totalnumberofdirectornominees 10 | NoticeofAnnualMeetingofShareholdersand2018ProxyStatement Total of 02 pages in section BOARDOFDIRECTORSANDCORPORATEGOVERNANCE 0 – 4 Years 11+ Years 5 – 10 Years DISTRIBUTIONOFDIRECTORNOMINEETENURE (1) (1) IncludesMs.Bitainthe0-4yearcategoryand,althoughtheentireboardwasrebuiltatthetimeoftheMergerin2011,weinclude Mr.Moghadam,Mr.Skelton,Mr.LoshandMs.Kennardinthe11+yearcategoryastheyweredirectorsofthelegalacquirerpriortothe Merger. TheBoardiscommittedtoregularrefreshmenttomaintainanoptimal balanceofdifferentperspectivesandproperoversightoverthecompany. TheBoardwascompletelyrefreshedandrebuiltatthetimeoftheMerger in2011.TheMergeressentiallycreatedanewcompanywithanew operatingandcorporateplatform.Atthattime,alldirectorsunderwent intensivereviewtodeterminewhichdirectorswouldbestfitthenewly createdcombinedcompany. Eachdirectorselectedinthisrebuildingprocesswasonboardedasanew directortothenewlyestablishedcompany.Thesedirectorswererequired toperforminanewgovernanceenvironment,withnewstructures, processes,committees,chartersandguidelines. WehavecontinuedtorefreshtheBoardsincetheMerger.DavidO’Connor onboardedasanewdirectorin2015,OlivierPianionboardedasanew directorin2017andMs.Bitaisanewdirectornomineeinour2018annual election.Ourdirectorcandidatesearchprocessactivelyidentifiesand assessesapoolofpotentialcandidatesthroughavarietyofsources, primarilythroughinternalreferences.Thisprocesswillservetocontinueto refreshtheBoardandmaintainabalancedmixofnewperspectivesand experience. I 11