3250 Van Ness Avenue

San Francisco, California 94109

www.williams-sonomainc.com

 

NOTICE OF 2021 ANNUAL MEETING OF STOCKHOLDERS

 

MEETING DATE:		June 2, 2021
TIME:		9:00 a.m. Pacific Time
PLACE:		Virtual meeting via live webcast. Registration is required online at register.proxypush.com/wsm.
ITEMS OF BUSINESS:		1)  The election of our Board of Directors;
		2)  The amendment of our 2001 Long-Term Incentive Plan;
		3)  An advisory vote on executive compensation;
		4)  The ratification of the selection of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending January 30, 2022; and
		5)  Such other business as may properly come before the meeting or any adjournment or postponement of the meeting.
RECORD DATE:		You may vote if you were a stockholder of record as of the close of business on April 5, 2021.

 

Williams-Sonoma, Inc.’s 2021 Annual Meeting of Stockholders (the “Annual Meeting”) will be held as a virtual-only meeting on June 2, 2021 at 9:00 a.m. Pacific Time, due to the public health and travel safety concerns relating to the COVID-19 pandemic, and to support the health and safety of our stockholders, employees and other stakeholders. We expect to return to in-person annual meetings when it becomes safe to do so.

 

The platform for the virtual Annual Meeting includes functionality that affords validated stockholders the same meeting participation rights and opportunities they would have at an in-person meeting. Stockholders who attend the virtual Annual Meeting by following the instructions below will have the opportunity to vote and submit questions or comments electronically during the Annual Meeting.

 

Access and Log-in Instructions for Virtual Annual Meeting

 

Only stockholders of record and beneficial owners of shares of our common stock as of the close of business on April 5, 2021, the record date, may attend and participate in the virtual Annual Meeting, including voting and asking questions during the virtual Annual Meeting. You will not be able to attend the Annual Meeting in person.

 

To attend the virtual Annual Meeting, you must register at register.proxypush.com/wsm. Upon completing your registration, you will receive further instructions via email, including a unique link that will allow you access to the Annual Meeting and to vote and submit questions during the Annual Meeting.

 

As part of the registration process, you must enter the control number located on your proxy card, voting instruction form, or Notice of Internet Availability. If you are a beneficial owner of shares registered in the name of a broker, bank or other nominee, you will also need to provide the registered name on your account and the name of your broker, bank or other nominee as part of the registration process.

On the day of the Annual Meeting, June 2, 2021, stockholders may begin to log in to the virtual-only Annual Meeting 15 minutes prior to the start of the Annual Meeting. The Annual Meeting will begin promptly at 9:00 a.m. Pacific Time.

 

How Beneficial Owners May Participate in the Virtual Annual Meeting

 

If you hold your shares in street name through an intermediary, such as a bank, broker or other nominee, to attend and submit questions at the virtual Annual Meeting, you must obtain a control number in advance. This is a different number than what is on your voting instruction form. To obtain a control number, follow the instructions provided by your bank, broker or other nominee. Once you have your new control number, please follow the steps set forth above to access the virtual Annual Meeting.

 

If you hold your shares in street name, in order to vote during the virtual Annual Meeting, you also must obtain in advance a “legal proxy” from your bank, broker or other nominee. To cast your vote during the meeting, follow the instructions on the virtual Annual Meeting website for completing an online ballot and submit the completed ballot along with a copy of your legal proxy via email.

 

List of Stockholders

 

During the virtual Annual Meeting, a list of our stockholders will be available for viewing by stockholders who signed into the virtual Annual Meeting website with a valid control number by following the instructions on the virtual Annual Meeting website. The names of stockholders of record entitled to vote will also be available for inspection by stockholders of record for ten (10) days prior to the Annual Meeting. If you are a stockholder of record and want to inspect the stockholder list, please send a written request by writing to: Williams-Sonoma, Inc., Attention: Corporate Secretary, 3250 Van Ness Avenue, San Francisco, California 94109 to arrange for electronic access to the stockholder list.

 

 

 

YOUR VOTE IS IMPORTANT

 

Instructions for submitting your proxy are provided in the Notice of Internet Availability of Proxy Materials, the Proxy Statement and your proxy card. It is important that your shares be represented and voted at the Annual Meeting. Whether or not you plan to attend the Annual Meeting, we urge you to vote and submit your proxy in advance of the meeting by one of the methods described in the proxy materials. Please submit your proxy through the Internet, by telephone, or by completing the enclosed proxy card and returning it in the enclosed envelope. You may revoke your proxy at any time prior to its exercise at the virtual Annual Meeting.

TABLE OF CONTENTS

 

		Page
GENERAL INFORMATION			1
CORPORATE GOVERNANCE			6
PROPOSAL 1—ELECTION OF DIRECTORS			20
PROPOSAL 2—AMENDMENT OF OUR 2001 LONG-TERM INCENTIVE PLAN			25
PROPOSAL 3—ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION			37
PROPOSAL 4—RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			39
AUDIT AND FINANCE COMMITTEE REPORT			41
INFORMATION CONCERNING EXECUTIVE OFFICERS			43
EXECUTIVE COMPENSATION			44
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS			85
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT			86
STOCKHOLDER PROPOSALS			89
NOTE ABOUT FORWARD-LOOKING STATEMENTS			90
INFORMATION REFERENCED IN THIS PROXY STATEMENT			90
AVAILABILITY OF PROXY STATEMENT AND ANNUAL REPORT ON FORM 10-K			91

 

i

 

3250 Van Ness Avenue

San Francisco, California 94109

www.williams-sonomainc.com

 

PROXY STATEMENT FOR THE 2021 ANNUAL MEETING OF STOCKHOLDERS

 

---

 

GENERAL INFORMATION

 

Our Board of Directors is soliciting your proxy to vote your shares at our 2021 Annual Meeting of Stockholders, or the Annual Meeting, to be held on Wednesday, June 2, 2021 at 9:00 a.m. Pacific Time, and for any adjournment or postponement of the meeting. Our Annual Meeting will be held virtually via live webcast due to the public health and travel safety concerns relating to the COVID-19 pandemic, and to support the health and safety of our stockholders, employees and other stakeholders. Registration is required online at register.proxypush.com/wsm. Details on how to participate are provided below

 

Our Annual Report to Stockholders for the fiscal year ended January 31, 2021, or fiscal 2020, including our financial statements for fiscal 2020, is also included with this Proxy Statement and posted on our website at ir.williams-sonomainc.com/financial-reports-page. The Annual Report, Notice of Internet Availability of Proxy Materials, or the Notice, and the Proxy Statement were first made available to stockholders and posted on our website on or about April 16, 2021.

 

Why are you holding a virtual Annual Meeting?

 

We will be hosting the Annual Meeting virtually due to the public health and travel safety concerns relating to the COVID-19 pandemic, and to support the health and safety of our stockholders, employees and other stakeholders. The platform for the virtual Annual Meeting includes functionality that affords validated stockholders the same meeting participation rights and opportunities they would have at an in-person meeting. Stockholders who attend the virtual Annual Meeting by following the instructions below will have the opportunity to vote and submit questions or comments electronically during the Annual Meeting.

 

How can stockholders attend the virtual Annual Meeting?

 

If you are a stockholder of record, to attend, vote, and submit questions at the virtual Annual Meeting, you must register at register.proxypush.com/wsm. Upon completing your registration, you will receive further instructions via email, including a unique link that will allow you access to the Annual Meeting and to vote and submit questions during the Annual Meeting.

 

As part of the registration process, you must enter the control number located on your proxy card, voting instruction form, or Notice of Internet Availability. If you are a beneficial owner of shares registered in the name of a broker, bank or other nominee, you will also need to provide the registered name on your account and the name of your broker, bank or other nominee as part of the registration process.

 

On the day of the Annual Meeting, June 2, 2021, stockholders may begin to log in to the virtual-only Annual Meeting 15 minutes prior to the start of the Annual Meeting. The Annual Meeting will begin promptly at 9:00 a.m. Pacific Time.

 

If you hold your shares in street name through an intermediary, such as a bank, broker or other nominee, to attend and submit questions at the virtual Annual Meeting, you must obtain a control number in advance. This is a different number than what is on your voting instruction form. To obtain a control number, follow the instructions provided by your bank, broker or other nominee. Once you have your new control number, please follow the steps set forth above to access the virtual Annual Meeting website.

 

1

If you hold your shares in street name, in order to vote during the virtual Annual Meeting, you also must obtain in advance a “legal proxy” from your bank, broker or other nominee. To cast your vote during the meeting, follow the instructions on the virtual Annual Meeting website for completing an online ballot and submit the completed ballot along with a copy of your legal proxy via email.

 

Will you make a list of the stockholders of record entitled to vote at the 2021 Annual Meeting available?

 

During the virtual Annual Meeting, a list of our stockholders will be available for viewing by stockholders who signed into the virtual Annual Meeting website with a valid control number by following the instructions on the virtual Annual Meeting website. The names of stockholders of record entitled to vote will also be available for inspection by stockholders of record for ten (10) days prior to the Annual Meeting. If you are a stockholder of record and want to inspect the stockholder list, please send a written request to: Williams-Sonoma, Inc., Attention: Corporate Secretary, 3250 Van Ness Avenue, San Francisco, California 94109 to arrange for electronic access to the stockholder list.

 

What is the purpose of the Annual Meeting?

 

Stockholders will be asked to vote on the following matters:

 

1)

The election of our Board of Directors;

 

2)

The amendment of our 2001 Long-Term Incentive Plan;

 

3)

An advisory vote to approve executive compensation;

 

4)

The ratification of the selection of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending January 30, 2022; and

 

5)

Such other business as may properly come before the meeting or any adjournment or postponement of the meeting, including stockholder proposals. At this time, we do not know of any other matters to be brought before the Annual Meeting.

 

What is the Notice of Internet Availability of Proxy Materials?

 

In accordance with rules and regulations adopted by the SEC, instead of mailing a printed copy of our proxy materials to all stockholders entitled to vote at the Annual Meeting, we are furnishing the proxy materials to certain of our stockholders over the Internet. If you received the Notice, by mail, you will not receive a printed copy of the proxy materials. Instead, the Notice will instruct you as to how you may access and review the proxy materials and submit your vote on the Internet or by telephone. If you received a Notice by mail and would like to receive a printed copy of the proxy materials, please follow the instructions for requesting such materials included in the Notice.

 

On the date of mailing of the Notice, all stockholders will have the ability to access all of our proxy materials on a website referred to in the Notice. These proxy materials will be available free of charge.

 

Can I receive future proxy materials by e-mail?

 

Yes. You may choose to receive future proxy materials by e-mail by following the instructions provided on the website referred to in the Notice. Choosing to receive your future proxy materials by e-mail will save us the cost of printing and mailing documents to you and will reduce the impact of our Annual Meeting on the environment.

 

If you choose to receive future proxy materials by e-mail, you will receive an e-mail next year with instructions containing a link to those materials and a link to the proxy voting site. Your election to receive proxy materials by e-mail will remain in effect until you terminate it.

 

Who may vote?

 

Only stockholders of record as of the close of business on April 5, 2021, the record date, or those with a valid proxy from a bank, broker or other nominee that held our shares on the record date, are entitled to receive notice

 

2

of and vote on the matters to be considered at the Annual Meeting. Each holder of our common stock will be entitled to one vote for each share of our common stock owned as of the record date. As of the record date, there were 75,282,307 shares of our common stock outstanding and entitled to vote, and there were 298 stockholders of record, which number does not include beneficial owners of shares held in the name of a bank or brokerage firm. We do not have any outstanding shares of preferred stock.

 

How do I vote?

 

You may vote at the virtual Annual Meeting held via live webcast, electronically by submitting your proxy through the Internet, by telephone or by returning a hard copy of the proxy card before the Annual Meeting. Proxies properly executed, returned to us on a timely basis and not revoked will be voted in accordance with the instructions contained in the proxy. If any matter not described in this Proxy Statement is properly presented for action at the meeting, the persons named in the enclosed proxy will have discretionary authority to vote according to their best judgment.

 

How do I vote electronically or by telephone?

 

You may vote by submitting your proxy through the Internet or by telephone. The Internet and telephone voting procedures are designed to authenticate your identity as a Williams-Sonoma, Inc. stockholder, to allow you to vote your shares and to confirm that your instructions have been properly recorded. Specific instructions to be followed for voting on the Internet or by telephone are provided below in this Proxy Statement, in the Notice and on the proxy card.

 

Shares Registered Directly in the Name of the Stockholder

 

If your shares are registered directly in your name in our stock records maintained by our transfer agent, EQ Shareowner Services, then you may vote your shares:

 

•

on the Internet at www.proxypush.com/wsm; or

 

•

by calling EQ Shareowner Services from within the United States at 866-883-3382.

 

Proxies for shares registered directly in your name that are submitted on the Internet or by telephone must be received before noon Pacific Time on Tuesday, June 1, 2021.

 

Shares Registered in the Name of a Brokerage Firm or Bank

 

If your shares are held in an account at a brokerage firm or bank, you should follow the voting instructions on the Notice or the voting instruction card provided by your brokerage firm or bank.

 

Can I vote my shares by filling out and returning the Notice?

 

No. The Notice identifies the items to be voted on at the Annual Meeting, but you cannot vote by marking the Notice and returning it. The Notice provides instructions on how to vote on the Internet or by telephone and how to request paper copies of the proxy materials.

 

What if I return my proxy card directly to the company, but do not provide voting instructions?

 

If a signed proxy card is returned to us without any indication of how your shares should be voted, votes will be cast “FOR” the election of the directors named in this Proxy Statement, “FOR” the amendment of our 2001 Long-Term Incentive Plan, “FOR” the approval, on an advisory basis, of the compensation of our Named Executive Officers, and “FOR” the ratification of the selection of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending January 30, 2022.

 

Who may attend the Annual Meeting?

 

Only stockholders of record as of the close of business on April 5, 2021, the record date, or those with a valid proxy from a bank, broker or other nominee that held our shares on the record date, are entitled to vote on the matters to be considered at the Annual Meeting.

 

3

How many shares must be present to transact business at the Annual Meeting?

 

Stockholders holding a majority of our outstanding shares as of the record date must be present virtually or by proxy at the Annual Meeting so that we may transact business. This is known as a quorum. Shares that are voted at the Annual Meeting, on the Internet, by telephone or by signed proxy card, and abstentions and broker non-votes, will be included in the calculation of the number of shares considered to be present for purposes of determining whether there is a quorum at the Annual Meeting.

 

What is a broker non-vote?

 

The term broker non-vote refers to shares that are held of record by a broker for the benefit of the broker’s clients but that are not voted at the Annual Meeting by the broker on certain non-routine matters set forth in New York Stock Exchange, or NYSE, Rule 402.08(B) because the broker did not receive instructions from the broker’s clients on how to vote the shares and, therefore, was prohibited from voting the shares.

 

How many votes are needed to elect directors?

 

Pursuant to a majority voting bylaw adopted by our Board of Directors and further described in our Amended and Restated Bylaws, the election of each of the seven director nominees requires the affirmative vote of a majority of the votes cast at the Annual Meeting with respect to each nominee. The number of shares voted “for” a director nominee must exceed the number of votes cast “against” that nominee for the nominee to be elected as a director to serve until the next annual meeting or until his or her successor has been duly elected and qualified. Your proxy will be voted in accordance with your instructions. If no instructions are given, the proxy holders will vote “FOR” each of the director nominees. If you hold your shares through a brokerage, bank or other nominee, or in “street name,” it is important to cast your vote if you want it to count in the election of directors. If you hold your shares in street name and you do not instruct your bank or broker how to vote your shares in the election of directors, no votes will be cast on your behalf. Broker non-votes and abstentions will have no effect on the outcome of the election.

 

Pursuant to the resignation policy adopted by our Board of Directors and further described in our Corporate Governance Guidelines, any nominee for director who is not elected shall promptly tender his or her conditional resignation to our Board of Directors following certification of the stockholder vote. The Nominations, Corporate Governance and Social Responsibility Committee will consider the resignation offer and recommend to our Board of Directors the action to be taken with respect to the offered resignation. In determining its recommendation, the Nominations, Corporate Governance and Social Responsibility Committee shall consider all factors it deems relevant. Our Board of Directors will act on the Nominations, Corporate Governance and Social Responsibility Committee’s recommendation within 90 days following certification of the stockholder vote and will publicly disclose its decision with respect to the director’s resignation offer (and the reasons for rejecting the resignation offer, if applicable).

 

Any director who tenders his or her resignation pursuant to the resignation policy shall not participate in the Nominations, Corporate Governance and Social Responsibility Committee’s recommendation or Board of Directors action regarding whether to accept the resignation offer. If each member of the Nominations, Corporate Governance and Social Responsibility Committee is required to tender his or her resignation pursuant to the resignation policy in the same election, then the independent directors of our Board of Directors who are not required to tender a resignation pursuant to the resignation policy shall consider the resignation offers and make a recommendation to our Board of Directors.

 

To the extent that one or more directors’ resignations are accepted by our Board of Directors, our Board of Directors in its discretion may determine either to fill such vacancy or vacancies or to reduce the size of the Board within the authorized range.

 

4

How many votes are needed to approve Proposals 2, 3 and 4?

 

Proposals 2, 3 and 4 require the affirmative vote of holders of a majority of voting power entitled to vote thereon, present virtually or represented by proxy, at the Annual Meeting. Proxy cards marked “abstain” will have the effect of a “NO” vote and broker non-votes will have no effect on the outcome of the vote.

 

The outcome of Proposal 3, the advisory vote on the approval of the compensation of our Named Executive Officers, will not be binding on us or the Board. However, the Board and the Compensation Committee will review the voting results and take them into consideration when making future decisions regarding executive compensation.

 

Are there any stockholder proposals this year?

 

No stockholder proposals are included in this Proxy Statement, and we have not received notice of any stockholder proposals to be raised at this year’s Annual Meeting.

 

What if I want to change my vote(s)?

 

You may revoke your proxy prior to the close of voting at the Annual Meeting by any of the following methods:

 

•

sending written notice of revocation to our Secretary;

 

•

sending a signed proxy card bearing a later date;

 

•

voting by telephone or on the Internet at a later date; or

 

•

attending the virtual Annual Meeting, revoking your proxy and voting virtually.

 

What is householding?

 

Householding is a cost-cutting procedure used by us and approved by the SEC to limit duplicate copies of our proxy materials being printed and delivered to stockholders sharing a household. Under the householding procedure, we send only one Notice or Annual Report and Proxy Statement to stockholders of record who share the same address and last name, unless one of those stockholders notifies us that the stockholder would like a separate Notice or Annual Report and Proxy Statement. A separate proxy card is included in the materials for each stockholder of record. A stockholder may notify us that the stockholder would like a separate Notice or Annual Report and Proxy Statement by phone at 415-421-7900 or by mail at the following mailing address: Williams-Sonoma, Inc., Attention: Annual Report Administrator, 3250 Van Ness Avenue, San Francisco, California 94109. If we receive such notification that the stockholder wishes to receive a separate Notice or Annual Report and Proxy Statement, we will promptly deliver such Notice or Annual Report and Proxy Statement. If you wish to update your participation in householding, you may contact your broker or our mailing agent, Broadridge Investor Communications Solutions, at 800-542-1061.

 

What if I received more than one proxy card?

 

If you received more than one proxy card, it means that you have multiple accounts with brokers and/or our transfer agent. You must complete each proxy card in order to ensure that all shares beneficially held by you are represented at the meeting. If you are interested in consolidating your accounts, you may contact your broker or our transfer agent, EQ Shareowner Services, at 800-468-9716.

 

Who pays the expenses incurred in connection with the solicitation of proxies?

 

We pay all of the expenses incurred in preparing, assembling and mailing the Notice or this Proxy Statement and the materials enclosed. We have retained Skinner & Company to assist in the solicitation of proxies at an estimated cost to us of $7,000. Some of our officers or employees may solicit proxies personally or by telephone or other means. None of those officers or employees will receive special compensation for such services.

 

5

CORPORATE GOVERNANCE

 

Corporate Governance Highlights

 

P	Active and ongoing stockholder engagement

 

P	Independent Board Chair

 

P	Regular Board and committee refreshments with a range of tenures

 

P	Diverse Board that provides a range of viewpoints

 

P	Annual election of all directors

 

P	All directors are independent except the CEO

 

P	Majority voting for directors (in uncontested elections)

 

P	Mandatory retirement age (72) policy for all directors

 

P	Ten (10) year director term limit

 

P	Proxy access rights

 

P	Significant share ownership requirements for senior executives and directors

 

P	Robust Business Code of Conduct and Ethics

 

P	Annual board and committee performance evaluations

 

P	No multi-class voting stock or non-voting stock

 

P	Director access to experts and advisors, both internal and external

 

Director Independence

 

Our Board of Directors has determined that the following former, current, or prospective members of the Board satisfied the independence requirements of our “Policy Regarding Director Independence Determinations,” which is part of our Corporate Governance Guidelines: Adrian Bellamy, Esi Eggleston Bracey, Scott Dahnke, Anne Mulcahy, Grace Puma, William Ready, Sabrina Simmons and Frits van Paasschen. In making this determination in the case of Mr. Ready, the Board considered his role with Google LLC, which provides certain advertising and related services to the company and determined that Mr. Ready did not have any direct involvement in our business relationship with Google and the amounts paid to Google were immaterial. Accordingly, the Board has determined that none of these individuals has a material relationship with us and that each of these individuals is independent within the meaning of the NYSE and SEC director independence standards, as currently in effect. Further, each member of our Board committees satisfied the independence requirements of the NYSE and SEC, and any heightened independence standards applicable to each committee on which they serve. The Board’s independence determination was based on information provided by our directors and discussions among our officers and directors.

 

Board Leadership Structure

 

We currently separate the positions of Chief Executive Officer and Board Chair. Mr. Dahnke, an independent director, has served as our Board Chair since June 2020. Our Corporate Governance Guidelines provide that in the event that the Board Chair is not an independent director, the Board shall elect a Lead Independent Director. As Mr. Dahnke is an independent director, we have not appointed a separate Lead Independent Director.

 

Separating the positions of Chief Executive Officer and Board Chair maximizes the Board’s independence and aligns our leadership structure with current trends in corporate governance best practices. Our Chief Executive Officer is responsible for day-to-day leadership and for setting the strategic direction of the company, while the Board Chair provides independent oversight and advice to our management team, and presides over Board meetings.

 

Board Meetings and Executive Sessions

 

During fiscal 2020, our Board held a total of 5 meetings. Each director who was a member of our Board during fiscal 2020 attended at least 75% of the aggregate of (i) the total number of meetings of the Board held during the

 

6

period for which such director served as a director and (ii) the total number of meetings held by all committees of the Board on which such director served during the periods that such director served.

 

It is the Board’s policy to have a separate meeting time for independent directors, typically during the regularly scheduled Board meetings. During fiscal 2020, executive sessions were led by our former Board Chair, Mr. Bellamy, prior to June 3, 2020, and by our current Board Chair, Mr. Dahnke, after June 3, 2020.

 

Attendance of Directors at Annual Meeting of Stockholders

 

It is our policy that directors who are nominated for election at our Annual Meeting should attend the Annual Meeting. All directors who were nominated for election at our 2020 Annual Meeting attended the meeting.

 

Board Committees

 

Our Board has three standing committees: the Audit and Finance Committee, the Compensation Committee and the Nominations, Corporate Governance and Social Responsibility Committee. Each committee operates under a written charter adopted by the Board. The committee charters are each available on the company’s website at ir.williams-sonomainc.com/governance and are also available in print to any stockholder upon request.

 

7

The following table sets forth the members of each committee as of April 5, 2021, the functions of each committee, and the number of meetings held during fiscal 2020.

 

Committee and Members		Functions of Committee		Number of Meetings in Fiscal 2020
Audit and Finance: Sabrina Simmons, Chair Anne Mulcahy William Ready		• Assists our Board in its oversight of the integrity of our financial statements; the qualifications, independence, retention and compensation of our independent registered public accounting firm; the performance of our internal audit function; and our compliance with legal and regulatory requirements; • Prepares the report that the SEC rules require to be included in our annual proxy statement; • Reviews and recommends policies related to dividend, stock repurchase and foreign currency programs; and • Assists the Board with its oversight of our major financial risk exposures, and reviews with management such exposures and the steps management has taken to monitor and control such exposures.		10
Compensation: Scott Dahnke, Chair Frits van Paasschen		• Reviews and determines our executive officers’ compensation; • Reviews and determines our general compensation goals and guidelines for our employees; • Administers certain of our compensation plans and provides assistance and recommendations with respect to other compensation plans; • Reviews the compensation discussion and analysis report that the SEC rules require to be included in our annual proxy statement; • Assists the Board with its oversight of risk arising from our compensation policies and programs, and assesses on an annual basis potential material risk from our compensation policies and programs; and • Appoints, sets the compensation of, and determines independence of any compensation consultant or other advisor retained.		5
Nominations, Corporate Governance and Social Responsibility: Frits van Paasschen, Chair Scott Dahnke Anne Mulcahy		• Reviews and recommends corporate governance policies; • Identifies and makes recommendations for nominees for director and considers criteria for selecting director candidates; • Considers stockholders’ director nominations and proposals; • Reviews and determines our compensation policy for our non-employee directors; • Considers resignation offers of director nominees and recommends to the Board the action to be taken with respect to each such offered resignation; • Oversees the evaluation of our Board and our senior management team; and • Oversees corporate social responsibility, sustainability, stockholder engagement and disclosure regarding corporate social responsibility and sustainability matters.		4

 

8

Audit and Finance Committee

 

The Board has determined that each member of the Audit and Finance Committee is independent under the NYSE rules, as currently in effect, and Rule 10A-3 of the Securities Exchange Act of 1934, as amended. The Board has determined that Ms. Simmons is an “audit committee financial expert” under the SEC rules. The Board has also determined that each Audit and Finance Committee member is “financially literate,” as described in the NYSE rules.

 

No member of the Audit and Finance Committee may serve on the audit committees of more than three public companies, including the company, unless the Board determines that such simultaneous service would not impair the ability of such member to effectively serve on our Audit and Finance Committee and discloses such determination in accordance with NYSE requirements. Ms. Simmons currently serves on the audit committee of Coursera, Inc., e.l.f. Beauty, Inc., Petco Health and Wellness Company, Inc., and the company, but has announced that she will resign from the board of e.l.f. Beauty, Inc. effective as of May 31, 2021. Our Board has considered Ms. Simmons’ service on the audit committees of three other public companies until her resignation from e.l.f. Beauty, Inc. and has determined that such simultaneous service does not impair her ability to effectively serve as a member of our Audit and Finance Committee.

 

Compensation Committee

 

The Board has determined that each member of the Compensation Committee is independent under the NYSE rules, as currently in effect, is an “outside director” as such term is defined with respect to Section 162(m) of the Internal Revenue Code and is a “non-employee director” under Section 16(b) of the Securities Exchange Act of 1934.

 

Compensation Committee Interlocks and Insider Participation

 

Mr. Bellamy, Mr. Dahnke and Mr. van Paasschen served as members of the Compensation Committee during fiscal 2020. No member of this committee was at any time during fiscal 2020 or at any other time an officer or employee of the company, or had any relationship with the company requiring disclosure under Item 404 of Regulation S-K. In addition, none of our executive officers served as a member of the board of directors or compensation committee of any entity that has or had one or more executive officers serving as a member of our Board or Compensation Committee.

 

Nominations, Corporate Governance and Social Responsibility Committee

 

The Board has determined that each member of the Nominations, Corporate Governance and Social Responsibility Committee is independent under the NYSE rules currently in effect. Each member of the Nominations, Corporate Governance and Social Responsibility Committee is a non-employee director.

 

During fiscal 2020, in furtherance of the Nominations, Corporate Governance and Social Responsibility Committee’s functions, the Committee took the following actions, among other things:

 

•

Evaluated the composition of the Board, and considered desired skill sets, qualities and experience for potential future Board members, as well as potential candidates;

 

•

Evaluated the composition of the committees of the Board;

 

•

Oversaw key initiatives related to corporate social responsibility, sustainability and stockholder engagement;

 

•

Considered and recommended to the Board the submission to stockholders of the director nominees described in the company’s 2020 Proxy Statement; and

 

•

Managed the annual Board self-assessment process.

 

9

Director Nominations

 

The Nominations, Corporate Governance and Social Responsibility Committee’s criteria and process for evaluating and identifying the candidates that it selects, or recommends to the Board for selection, as director nominees are as follows:

 

•

The Nominations, Corporate Governance and Social Responsibility Committee periodically reviews the current composition and size of the Board;

 

•

The Nominations, Corporate Governance and Social Responsibility Committee manages the annual self-assessment of the Board as a whole and considers the performance and qualifications of individual members of the Board when recommending individuals for election or re-election to the Board;

 

•

The Nominations, Corporate Governance and Social Responsibility Committee reviews the qualifications of any candidates who have been properly recommended by stockholders, as well as those candidates who have been identified by management, individual members of the Board or, if it deems appropriate, a search firm. Such review may, in the Nominations, Corporate Governance and Social Responsibility Committee’s discretion, include a review solely of information provided to it or also may include discussions with persons familiar with the candidate, an interview with the candidate or other actions that the Nominations, Corporate Governance and Social Responsibility Committee deems appropriate;

 

•

In evaluating the qualifications of candidates for the Board, the Nominations, Corporate Governance and Social Responsibility Committee considers many factors, including issues of character, judgment, independence, financial expertise, industry experience, range of experience, and other commitments. The Nominations, Corporate Governance and Social Responsibility Committee values diversity, but does not assign any particular weight or priority to any particular factor. The Nominations, Corporate Governance and Social Responsibility Committee considers each individual candidate in the context of the current perceived needs of the Board as a whole. While the Nominations, Corporate Governance and Social Responsibility Committee has not established specific minimum qualifications for director candidates, it believes that candidates and nominees must be suitable for a Board that is composed of directors (i) a majority of whom are independent; (ii) who are of high integrity; (iii) who have qualifications that will increase the overall effectiveness of the Board; and (iv) who meet the requirements of all applicable rules, such as financial literacy or financial expertise with respect to Audit and Finance Committee members;

 

•

In evaluating and identifying candidates, the Nominations, Corporate Governance and Social Responsibility Committee has the sole authority to retain and terminate any third-party search firm that is used to identify director candidates and the sole authority to approve the fees and retention terms of any search firm;

 

•

After such review and consideration, the Nominations, Corporate Governance and Social Responsibility Committee recommends to the Board the slate of director nominees; and

 

•

The Nominations, Corporate Governance and Social Responsibility Committee endeavors to notify, or cause to be notified, all director candidates of the decision as to whether to nominate individuals for election to the Board.

 

There are no differences in the manner in which the Nominations, Corporate Governance and Social Responsibility Committee evaluates nominees for director based on whether the nominee is recommended by a stockholder, management or a search firm.

 

Stockholder Recommendations

 

The Nominations, Corporate Governance and Social Responsibility Committee will consider recommendations from stockholders regarding possible director candidates for election at next year’s Annual Meeting. Pursuant to our Stockholder Recommendations Policy, the Nominations, Corporate Governance and Social Responsibility Committee considers recommendations for candidates to the Board from stockholders holding no fewer than 500 shares of the company’s common stock continuously for at least six months prior to the date of the submission of the recommendation.

 

10

A stockholder that desires to recommend a candidate for election to the Board shall direct the recommendation in writing to Williams-Sonoma, Inc., Attention: Corporate Secretary, 3250 Van Ness Avenue, San Francisco, California 94109. The recommendation must include: (i) the candidate’s name, home and business contact information; (ii) detailed biographical data and qualifications of the candidate; (iii) information regarding any relationships between the candidate and the company within the last three years; (iv) evidence of the recommending person’s ownership of company common stock; (v) a statement from the recommending stockholder in support of the candidate; and (vi) a written indication by the candidate of his or her willingness to serve if elected. A stockholder that desires to recommend a person directly for election to the Board at the company’s Annual Meeting must also meet the deadlines and other requirements set forth in Rule 14a-8 of the Securities Exchange Act of 1934 and the company’s Restated Bylaws, each of which are described in the “Stockholder Proposals” section on page 89.

 

Each director nominated in this Proxy Statement was recommended for election to the Board by the Nominations, Corporate Governance and Social Responsibility Committee. Director nominee Esi Eggleston Bracey was recommended for consideration by the company’s human resources department, which led a search for qualified director candidates. The Board did not receive any director nominee recommendation from any stockholder in connection with this Proxy Statement.

 

Risk Oversight

 

Board Oversight of Risk

 

The Board actively manages the company’s risk oversight process and receives regular reports from management on areas of material risk to the company, including operational, financial, legal and regulatory risks. Our Board committees assist the Board in fulfilling its oversight responsibilities in certain areas of risk. The Audit and Finance Committee assists the Board with its oversight of the company’s major financial risk exposures. Additionally, in accordance with NYSE requirements, the Audit and Finance Committee reviews with management the company’s major financial risk exposures and the steps management has taken to monitor and control such exposures, including the company’s risk assessment and risk management policies. The Compensation Committee assists the Board with its oversight of risks arising from our compensation policies and programs and assesses on an annual basis potential material risk to the company from its compensation policies and programs, including incentive and commission plans at all levels. The Nominations, Corporate Governance and Social Responsibility Committee assists the Board with its oversight of risks associated with Board organization, Board independence, succession planning, corporate governance, corporate social responsibility, and sustainability. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire Board is regularly informed through committee reports about such risks and participates in regularly-scheduled Board discussions covering such risks.

 

Cybersecurity Risk Oversight

 

The Board, which is comprised entirely of independent directors, except for our CEO, takes an active role in oversight of the company’s cybersecurity and data privacy policies. Among other things, at least annually, the Board receives an overview of the company’s cybersecurity program from the company’s management, covering topics such as information security, fraud, data security, and cybersecurity risk and developments, as well as the steps management has taken to monitor and control such exposures. Our Chief Technology Officer and Chief Information Security Officer also periodically update the Board regarding the company’s cybersecurity and data privacy risk mitigation plan, and the status of the company’s progress towards pre-determined risk-mitigation-related goals. Members of the Board are also encouraged to regularly engage in ad hoc conversations with management on cybersecurity-related news events and discuss any updates to the company’s cybersecurity programs.

 

The company maintains an information security risk insurance policy and also performs internal penetration testing and vulnerability assessments monthly and engages third-party penetration testers quarterly. An

 

11

independent Qualified Security Assessor annually reviews security practices and compliance and we train employees on customer data handling and use requirements annually. The company closely monitors emerging data privacy laws and implements changes to our processes to comply with global data privacy regulations. We undertake an annual review of our consumer facing privacy policies and associate privacy policies to ensure compliance. We also proactively inform our customers of substantive changes related to customer data handling.

 

Evaluation of Risks Relating to Compensation Programs

 

Our Compensation Committee is responsible for monitoring our compensation policies and programs relative to all our employees, including non-executive officers, for potential risks that are reasonably likely to have a material adverse effect on our company. In performing its duties, the Compensation Committee regularly reviews and discusses potential risks that could arise from our employee compensation plans and programs with our management and the Compensation Committee’s independent compensation consultant. The Compensation Committee is responsible for reporting to the Board any material risks associated with our compensation plans and programs, including recommended actions to mitigate such risks.

 

For fiscal 2020, the Compensation Committee retained an independent consultant, Pay Governance LLC, to identify and assess the risks inherent in the company’s compensation programs and policies. Accordingly, Pay Governance LLC evaluated the company’s executive and non-executive compensation programs for such risk and the mechanisms in our programs designed to mitigate these risks. Among other things, Pay Governance LLC reviewed our pay philosophy, forms of incentives, performance metrics, balance of cash and equity compensation, balance of long-term and short-term incentive periods, compensation governance practices, and equity grant administration practices. Based on the assessment, Pay Governance LLC concluded that our compensation programs and policies do not create risks that are reasonably likely to have a material adverse effect on our company.

 

Managing COVID-19 Risks

 

During fiscal 2020, to address the safety and wellbeing of our workforce due to the COVID-19 pandemic, we implemented a number of safety and wellbeing-related measures, including:

 

•

Temporarily closing our stores and corporate offices, and implementing temporary work-from-home-policies;

 

•

Increasing the company minimum wage to $14 per hour;

 

•

Providing special bonuses for frontline workers;

 

•

Providing pay continuation during the entire time that stores were closed due to the pandemic for store associates regularly scheduled to work more than 12 hours per week;

 

•

Creating a dedicated associate hotline to provide real time support for any COVID-related issues;

 

•

Reassigning associates whose work could not be done from home to other business-critical areas;

 

•

Establishing and implementing strict safety protocols across our stores, supply chain operations, and corporate offices, including social distancing measures, enhanced sanitization, daily wellness checks, increased ventilation, and the supply of personal protective gear such as masks and gloves;

 

•

Developing, distributing, and continuously updating a playbook to guide the safe return to offices, stores, and work sites;

 

•

Providing access to COVID-19 testing through on-site testing, at home test kits, and access at local COVID-19 testing centers; and

 

•

Creating and refining protocols to address actual and suspected COVID-19 cases and potential exposure of our team members, customers, and trade partners.

 

12

To address the financial impact of the COVID-19 pandemic, the Board, together with management, has overseen efforts to strengthen our financial position, including by:

 

•

Maintaining sufficient cash on-hand and a strong liquidity position throughout fiscal 2020;

 

•

Reducing nonessential business expenses, including the elimination of almost all business travel and other discretionary spending;

 

•

Delaying store remodels and relocations;

 

•

Negotiating various rent reductions with our landlords; and

 

•

Negotiating various technology, supply chain and professional service expense reductions with our vendors.

 

Corporate Responsibility & Sustainability

 

At Williams-Sonoma, Inc. and across all our brands, we are working to create a more sustainable and resilient company by prioritizing planet, people, and a shared purpose. We carry on the legacy that began with the first Williams Sonoma store in 1956—to care for our customers and the communities where we work. Building on that solid foundation, we are positioning our company to mitigate future risks and capture opportunity.

 

Williams-Sonoma, Inc. is Good by Design—our pillars of Planet, People, and Purpose represent a business-integrated Environmental, Social and Governance (ESG) strategy, with specific programs and concrete goals that aim to strengthen our company, deliver value to all stakeholders, and drive impact across our operations and supply chain. We have tracked and reported on our annual progress towards public goals and material ESG programs since 2011, focusing on quality products; responsible materials and production; safe, healthy and inclusive work environments; equality and equity; and impactful corporate citizenship.

 

Looking forward to 2021, we plan to continue to strategically align ESG programs and investments with our business, bringing value to our customers, associates, and the communities where we work.

 

Governance of Sustainability

 

Since 2019, our Nominations, Corporate Governance and Social Responsibility Committee and our Board has overseen ESG issues and sustainability. The Committee oversees corporate policies and programs that speak to long-standing commitments to our employees, supply chain, environment, health and safety, human rights, cybersecurity and ethics. These policies and programs are relevant to our business, critical to our employees, and important to our customers.

 

Management of sustainability is led by our Executive Vice President of Sourcing, who is responsible for coordinating a cross-functional team of subject matter experts. Management provides reports and updates on our sustainability initiatives to the Nominations, Corporate Governance and Social Responsibility Committee on a quarterly basis and to the full Board at least annually. Additional detail about our governance structure can be accessed on page 6 of our most recent Corporate Responsibility Report.

 

Planet

 

As a multinational retailer with a global supply chain, we are committed to environmentally sustainable practices across our business—from designing and sourcing responsible products and reducing waste to working with suppliers to lower emissions and adopt sustainable business practices. Our work has earned recognition across our industry, including:

 

•

Barron’s 100 Most Sustainable Companies;

 

•

Textile Exchange Top 10 global company for preferred fibers;

 

•

Sustainable Furnishings Council (SFC) Top Scoring global company for sustainable wood furniture; and

 

13

•

REPREVE’s Champion of Sustainability Award for diverting 66 million plastic bottles from landfills.

 

Responsible Materials & Finishes

 

One of our biggest impacts comes from the materials we use in our products. For that reason, we have made significant commitments to responsibly sourced materials and practices across all of our brands, including, 100% Forest Stewardship Council-certified catalog paper since 2006 and 100% GREENGUARD certified company-produced Pottery Barn Kids bedroom and nursery furniture, which we achieved in 2020. We are also on track to meet our goals of 100% responsibly sourced cotton by the end of 2021 and 50% responsibly sourced wood by the end of 2021. Today, over 1/3 of our products represent one of our responsibly sourced commitments, including third-party certified responsible materials and nontoxic finishes.

 

Climate & Energy

 

We have reported on and reduced our carbon and electricity intensity year-over-year since 2011 by investing in cost-saving reduction and retrofit projects. In 2020, we conducted a comprehensive footprint of our entire value chain and submitted our first public CDP Climate Disclosure with our Scope 3 data, which is available on our website: www.sustainability.williams-sonomainc.com. We are using this data to inform our alignment with Task Force on Climate-related Financial Disclosures (TCFD) and set public Science-Based Targets for emissions reduction across Scope 1, 2 and 3. Aligned with the Paris Agreement, these 2030 goals will help keep global temperature increases below 2 degrees Celsius while establishing a pathway to net-zero target-setting. We are also helping our customers lower their footprints—our consumer lighting products use LED bulbs across our brands, and we lead the design of energy-efficient lighting for a broad range of spaces, from homes to businesses.

 

Waste & Circularity

 

In 2020, we continued to drive progress towards our landfill diversion goals and embrace new circular opportunities. We launched two new circular resale programs: Pottery Barn Renewed, which extends the life of returned and imperfect products, and West Elm’s recycled denim collaboration with Eileen Fisher. We also continued to divert products from landfill into donation streams, and we expanded efforts to reduce packaging while converting our packaging programs to recycled and curbside-recyclable materials.

 

People

 

From the artisans and factory workers making our products to our associates, taking care of our people is a key priority. We strive to create a workplace where the quality of our engagement with fellow associates, business partners and customers matches the quality of the products and services we bring to the marketplace. These commitments have garnered external recognition including:

 

•

Forbes’ Best Employers for Women 2019-2020;

 

•

Forbes’ Best Employers for Diversity 2020;

 

•

Forbes’ Change the World List 2020; and

 

•

Bloomberg Gender-Equality Index Inclusion 2021.

 

COVID Response

 

The challenges of COVID put our people-first approach to the test. Our associates came together to prioritize health and safety for each other, our customers, and our communities – all while keeping our business thriving. Our distribution centers implemented strict safety protocols. During COVID-19 stay-at-home orders, associates worked from home and, whenever possible, we reassigned associates whose work could not be done from home to other business-critical activities such as customer care and digital design services. Our Williams-Sonoma, Inc. Foundation provided need-based grants to over 850 associates directly impacted by the pandemic. Globally, our vendors implemented stringent safety protocols, and nearly 70% of our Fair Trade Certified^™ factories used their community development funds to provide emergency relief to workers.

 

14

Ethical Production

 

We hold all our suppliers to high social standards, and we are committed to integrity and honesty throughout all aspects of our business. We require our vendors to adhere to high standards of corporate responsibility, outlined in our Vendor Code of Conduct and accompanying Implementation Standards, informed by the conventions of the International Labor Organization (ILO) and the UN’s Guiding Principles on Business and Human Rights. We audit over 500 factories annually to ensure compliance with Labor Practices, Health and Safety, Environmental Protection, Ethical Conduct, Sub-Contracting, Management Systems, and Transparency. Using continuous improvement, we work alongside factories to improve working conditions.

 

Worker Wellbeing

 

We go beyond compliance to develop industry-leading initiatives that improve the lives of workers. We were the first home retailer to bring Fair Trade USA’s factory certification program into the home sector and have exceeded our 2020 commitment to deliver $3 million in community development funds to workers. We were the founding partner with nonprofit Nest on its Ethical Handcrafted Program to bring transparency to artisanal supply chains and were the first retailer to feature the Nest Ethically Handcrafted seal on product. Through partnerships with HERproject and VisionSpring, we met our public goals and invested in financial and health education as well as vision services to increase the well-being and prosperity of approximately 100,000 workers in our supply chain as of the end of 2020.

 

Investing in our Associates: Equity & Inclusion

 

Through recruiting and retaining a diverse, talented workforce, soliciting and addressing feedback, and investing in training and development, we give our associates the tools to succeed, learn new skills and develop their careers. We firmly believe that working in a culture focused on diversity, equity and inclusion (DEI) spurs innovation, creates healthy and high-performing teams, and delivers superior customer experiences.

 

In June 2020, we established an Equity Action Plan and formed an Equity Action Committee to drive positive change in the fight for racial justice. Led by our CEO, a diverse group of executives and associates from across the company make up the committee and provide oversight of our DEI initiatives.

 

As part of our commitment to DEI, we published gender and ethnicity representation numbers for the first time in our most recent Corporate Responsibility Report. Some of our key representation statistics as of October 2019 were as follows:

 

 

*	If Esi Eggleston Bracey is elected, 57% of our Board will be female.

 

As of the end of 2020, 100% of open roles have a diverse slate of candidates and we have had a double-digit increase in Black representation since we launched our Equity Action Plan.

 

Since 2018, we have been a member of CEO Action for Diversity & Inclusion, where we announced a goal to identify and establish associate networks for underrepresented communities to promote diversity and inclusion throughout the company. Aligned with this goal, we developed associate groups including an LGBTQ+ Network, Black Associate Network, Veterans Appreciation Group, Hispanic Heritage Group, and an Asian American Pacific Islander Network. Ambassadors of these groups are instrumental in organizing celebrations for Diwali, Lunar New Year, Pride, Veteran’s Day, and Black History Month, as well as encouraging participation in annual company-wide volunteering on Martin Luther King, Jr. Day.

 

15

Purpose

 

As a values-based business, we rely on our associates to lead and make an impact every day. We cannot succeed without them—from the people working in our stores, to our corporate offices, to our factory floors. In 2020, we mapped our impact programs to all 17 United Nations Sustainable Development Goals, published our first Sustainability Accounting Standards Board (SASB) sector-specific disclosures and metrics, and became a first-time signatory to the United Nations Global Compact.

 

Outside of our operations, our mission of enhancing the quality of people’s lives at home guides our giving and volunteering strategy. We raise funds for and support a range of causes that reflect the passion and dedication of our associates and resonate with our customers. Since 2012, we have donated over $63 million in corporate, customer, and associate donations. Our partners include organizations that promote and strengthen the well-being of children, women, families and LGBTQ+ communities, such as St. Jude Children’s Research Hospital, No Kid Hungry, AIDS Walk, and Canada Children’s Hospitals. We also support organizations and partners, like Good360, that assist those whose homes have been damaged or lost. In 2020, we also established an Equity Action Committee to drive positive change through concrete goals around Black representation, unconscious bias education, and donations to nonprofit organizations advocating for racial justice and equity.

 

Volunteering deepens our presence in the community, enhances our relationships with customers, and strengthens employee engagement. We support our communities through our associates’ time and leadership, providing 8 hours of paid Community Involvement Time each year and encouraging associates to volunteer for local causes. Associates log an average of over 9,000 volunteer hours annually, choosing where to devote their time, with efforts ranging from school renovations to habitat restoration.

 

We invite you to learn more about our initiatives and impact our Corporate Responsibility & Sustainability site: www.sustainability.williams-sonomainc.com.

 

Director Compensation

 

Fiscal 2020 Highlights

 

•

Emphasis on equity in the overall compensation mix to support alignment with our stockholders.

 

•

Full-value equity grants under a fixed-value annual grant policy with vesting for retention purposes.

 

•

No performance-based equity awards.

 

•

A robust stock ownership guideline to support stockholder alignment.

 

•

A stockholder-approved annual limit on total director compensation.

 

•

No retirement benefits and limited perquisites.

 

Director Compensation Program

 

Overview

 

Our non-employee directors receive cash compensation and equity grants for their service on our Board, with additional cash and equity compensation provided to the Board Chair and the Chair of each Board committee. Decisions regarding our non-employee director compensation program are approved by the full Board based on recommendations by the Nominations, Corporate Governance and Social Responsibility Committee. In making such recommendations, the Nominations, Corporate Governance and Social Responsibility Committee takes into consideration the duties and responsibilities of our non-employee directors, the director compensation practices of peer companies and whether such recommendations align with the interests of our stockholders. The Nominations, Corporate Governance and Social Responsibility Committee periodically reviews the total compensation of our non-employee directors and each element of our director compensation program. At the

 

16

direction of the Nominations, Corporate Governance and Social Responsibility Committee, the Compensation Committee’s independent compensation consultant analyzes the competitive position of the company’s director compensation program against the peer group used for executive compensation purposes.

 

Director Stock Ownership Policy

 

The Board has approved a stock ownership policy. Each non-employee director must hold at least $400,000 worth of shares of company stock by the fifth anniversary of such director’s initial election to the Board. If a director holds at least $400,000 worth of shares of company stock during the required time period, but the value of such director’s shares decreases below $400,000 due to a drop in the company’s stock price, the director shall be deemed to have complied with this policy so long as the director does not sell shares of company stock. If a director has not complied with this policy during the required time period, then the director may not sell any shares until such director holds at least $400,000 worth of shares of company stock. A director’s unvested restricted stock units will not count toward satisfying the ownership requirements. As of April 5, 2021, all of our directors have satisfied the ownership requirements or have been on the Board for less than five years.

 

Stockholder Approved Compensation Limit

 

Under our stockholder-approved maximum annual limit on non-employee director compensation, stock awards granted during a single fiscal year under the plan or otherwise, taken together with any cash fees paid during such fiscal year for services on the Board, will not exceed $750,000 in total value for any non-employee director.

 

Fiscal 2020 Non-Employee Director Compensation

 

The following table sets forth non-employee director compensation amounts for fiscal 2020.

 

		Fiscal 2020
Per-Committee Meeting Attendance Fee			—
Annual Cash Compensation for Board Service(1)(2)		$	80,000
Annual Equity Grant for Board Service(2)(3)(4)		$	165,000
Annual Cash Compensation to Board Chair(1)		$	100,000
Annual Equity Grant to Board Chair(3)		$	100,000
Annual Cash Compensation to Chair of the Audit and Finance Committee(1)		$	25,500
Annual Equity Grant to Chair of the Audit and Finance Committee(3)		$	25,500
Annual Cash Compensation to Chair of the Compensation Committee(1)		$	12,500
Annual Equity Grant to Chair of the Compensation Committee(3)		$	12,500
Annual Cash Compensation to Chair of the Nominations, Corporate Governance and Social Responsibility Committee(1)		$	8,250
Annual Equity Grant to Chair of the Nominations, Corporate Governance and Social Responsibility Committee(3)		$	8,250

---

(1)	The annual cash compensation is paid in quarterly installments so long as the non-employee director continues to serve on the Board at the time of such payments.

 

(2)	Any cash compensation or equity grant otherwise payable to Scott Dahnke will be paid directly to or transferred from Mr. Dahnke to a non-investment fund affiliate of his employer.

 

(3)

The annual equity grant is awarded on the date of the Annual Meeting. Equity grants are made in the form of restricted stock units. These restricted stock units vest on the earlier of one year from the date of grant or the day before the next regularly scheduled annual meeting, subject to continued service through the vesting date. The number of restricted stock units granted is determined by dividing the total monetary value of each award, as set forth in the table, by the closing price of our common stock on the trading day prior to the grant date, rounding down to the nearest whole share. Directors also receive dividend equivalent payments with respect to outstanding restricted stock unit awards.

 

17

(4)

Directors who are appointed to the Board after the company’s last Annual Meeting receive an equity grant on the appointment date on a prorated basis based on the number of days that the director is scheduled to serve between the appointment date to the Board and the date one year from the prior year’s Annual Meeting.

 

In addition to the compensation described above, non-employee directors received reimbursement for travel expenses related to attending our Board, committee or business meetings. Non-employee directors and their spouses received discounts on our merchandise.

 

Director Compensation Table

 

The following table shows the compensation provided to non-employee directors who served during all or a portion of fiscal 2020.

 

		Fees Earned or Paid in Cash ($)				Stock Awards  ($)(1)				All Other Compensation ($)(2)(3)				Total ($)
Adrian Bellamy		$	64,519			$	—			$	9,383			$	73,902
Scott Dahnke		$	159,293			$	273,336	(4)		$	9,578			$	442,207
Anne Mulcahy		$	80,000			$	164,986	(5)		$	2,902			$	247,888
Grace Puma		$	26,813			$	—			$	170			$	26,983
William Ready		$	72,308			$	204,625	(6)		$	475			$	277,408
Sabrina Simmons		$	105,500			$	190,448	(7)		$	885			$	296,833
Frits van Paasschen		$	82,833			$	170,553	(8)		$	1,103			$	254,489

---

(1)

Represents the grant date fair value of the restricted stock unit awards granted in fiscal 2020 as calculated in accordance with FASB ASC Topic 718, by multiplying the closing price of our common stock on the trading day prior to the grant date by the number of restricted stock units granted. As of January 31, 2021, the persons who served as non-employee directors during all or a portion of fiscal 2020 held the following numbers of unvested restricted stock units: Adrian Bellamy: 0; Scott Dahnke: 3,175; Anne Mulcahy: 1,918; Grace Puma: 0; William Ready: 1,918; Sabrina Simmons: 2,214; and Frits van Paasschen: 1,981. Mr. Bellamy and Ms. Puma left the Board prior to the end of fiscal 2020.

 

(2)	Represents the taxable value of discount on merchandise.

 

(3)	Excludes dividend equivalent payments, which were previously factored into the grant date fair value of disclosed equity awards.

 

(4)

Represents the grant date fair value associated with a restricted stock unit award of 3,080 shares of common stock made on June 3, 2020, with a fair value as of the grant date of $86.02 per share for an aggregate grant date fair value of $264,942 and (ii) a restricted stock unit award of 95 shares of common stock made on September 29, 2020, with a fair value as of the grant date of $88.36 per share for an aggregate grant date fair value of $8,394.

 

(5)	Represents the grant date fair value associated with a restricted stock unit award of 1,918 shares of common stock made on June 3, 2020, with a fair value as of the grant date of $86.02 per share for an aggregate grant date fair value of $164,986.

 

(6)

Represents the grant date fair value associated with a restricted stock unit award of 659 shares of common stock made on March 9, 2020, with a fair value as of the grant date of $60.15 per share for an aggregate grant date fair value of $39,639 and (ii) a restricted stock unit award of 1,918 shares of common stock made on June 3, 2020, with a fair value as of the grant date of $86.02 per share for an aggregate grant date fair value of $164,986.

 

(7)	Represents the grant date fair value associated with a restricted stock unit award of 2,214 shares of common stock made on June 3, 2020, with a fair value as of the grant date of $86.02 per share for an aggregate grant date fair value of $190,448.

 

18

(8)

Represents the grant date fair value associated with a restricted stock unit award of 1,918 shares of common stock made on June 3, 2020, with a fair value as of the grant date of $86.02 per share for an aggregate grant date fair value of $164,986 and (ii) a restricted stock unit award of 63 shares of common stock made on September 29, 2020, with a fair value as of the grant date of $88.36 per share for an aggregate grant date fair value of $5,567.

 

Corporate Governance Guidelines and Code of Business Conduct and Ethics

 

Our Corporate Governance Guidelines and our Code of Business Conduct and Ethics, both of which apply to all of our employees, including our Chief Executive Officer, Chief Financial Officer and Controller, are available on our website at ir.williams-sonomainc.com/governance. Copies of our Corporate Governance Guidelines and our Code of Business Conduct and Ethics are also available upon written request and without charge to any stockholder by writing to: Williams-Sonoma, Inc., Attention: Corporate Secretary, 3250 Van Ness Avenue, San Francisco, California 94109. To date, there have been no waivers that apply to our Chief Executive Officer, Chief Financial Officer, Controller or persons performing similar functions under our Code of Business Conduct and Ethics. We intend to disclose any amendment to, or waivers of, the provisions of our Code of Business Conduct and Ethics that affect our Chief Executive Officer, Chief Financial Officer, Controller or persons performing similar functions by posting such information on our website at ir.williams-sonomainc.com/governance.

 

Communicating with Members of the Board

 

Stockholders and all other interested parties may send written communications to the Board or to any of our directors individually, including non-management directors and the of the Board, at the following address: Williams-Sonoma, Inc., Attention: Corporate Secretary, 3250 Van Ness Avenue, San Francisco, California 94109. All communications will be compiled by our Corporate Secretary and submitted to the Board or an individual director, as appropriate, on a periodic basis.

 

19

PROPOSAL 3

 

ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION

 

This is a proposal asking stockholders to approve, on an advisory basis, the compensation of our Named Executive Officers as disclosed in this Proxy Statement as required under Section 14A of the Exchange Act. This proposal is commonly known as a “Say on Pay” proposal and gives our stockholders the opportunity to express their views on the compensation of our Named Executive Officers. The company’s current policy is to hold a Say on Pay vote each year, and we expect to hold another advisory vote with respect to executive compensation at the 2022 Annual Meeting.

 

Compensation Program and Philosophy

 

As described in detail under the heading “Executive Compensation,” our executive officer compensation program is constructed to attract, retain and motivate a highly qualified executive team to support our primary objective of creating long-term value for stockholders, while maintaining direct links between executive pay, individual performance, the company’s financial performance and stockholder returns. A significant portion of individual compensation is directly dependent on the company’s achievement of financial goals, which we believe aligns executive interests with stockholder interests and encourages long-term stockholder returns. Further in alignment with stockholder interests, each of our Named Executive Officers is subject to a stock ownership requirement. The Chief Executive Officer is required to hold five times her base salary, and each of the other Named Executive Officers is required to hold two times their base salary in shares of common stock.

 

Fiscal 2020 Compensation Summary

 

To align our executive compensation packages with our executive compensation philosophy, the following compensation decisions were made by the Compensation Committee for fiscal 2020.

 

•

No Adjustments to Chief Executive Officer Compensation: The base salary, bonus target and annual equity grant were unchanged for fiscal 2020. Consistent with prior years, individual performance, an assessment of market data, and her experience in her role were also considered.

 

•

Performance-Based Cash Bonus: Performance-based cash bonuses were paid for fiscal 2020 performance based on the company’s earnings per share goal, the achievement of positive net cash provided by operating activities, business unit performance and the individual performance of our Named Executive Officers.

 

•

Performance-Based and Time-Based Equity: In fiscal 2020, our Named Executive Officers were granted performance stock units, or PSUs, based on performance against four equally-weighted metrics—revenue, earnings, return on invested capital and operating cash flow—and restricted stock units, or RSUs, with service vesting. The PSUs are earned based on actual three-year performance against each of the four metrics relative to target, subject to certain pre-established adjustments, and vest on the third anniversary of the grant date. No PSUs are earned for below threshold performance, 50% of target are earned for threshold performance, 100% of target are earned for target performance, and 200% of target are earned for maximum performance and above. The RSUs vest 25% per year over a four-year period beginning on the grant date.

 

In addition to the above summary, stockholders are encouraged to read the “Executive Compensation” section of this Proxy Statement for details about our executive compensation programs, including information about the fiscal 2020 compensation of our Named Executive Officers.

 

We are asking our stockholders to indicate their support for our Named Executive Officer compensation as described in this Proxy Statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our Named Executive Officers and the philosophy, policies and practices described in this Proxy Statement. Accordingly, we ask our stockholders to vote “FOR” the following resolution at the 2021 Annual Meeting:

 

“RESOLVED, that the company’s stockholders approve, on an advisory basis, the compensation of the Named Executive Officers, as disclosed in the company’s Proxy Statement for the 2021 Annual Meeting of

 

37

Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Executive Compensation, the tabular disclosure regarding such compensation and the accompanying narrative disclosure.”

 

Required Vote for this Proposal

 

To approve this proposal, a majority of voting power entitled to vote thereon, present virtually or represented by proxy, at the Annual Meeting must vote “FOR” this proposal.

 

This Say on Pay vote is advisory, and therefore not binding on the company, the Compensation Committee or our Board. Our Board and our Compensation Committee value the opinions of our stockholders and to the extent there is any significant vote against the Named Executive Officer compensation as disclosed in this Proxy Statement, we will consider our stockholders’ concerns and the Compensation Committee will evaluate whether any actions are necessary to address those concerns.

 

Under the rules of the NYSE, brokers are prohibited from giving proxies to vote on executive compensation matters unless the beneficial owner of such shares has given voting instructions on the matter. This means that if your broker is the record holder of your shares, you must give voting instructions to your broker with respect to Proposal 3 if you want your broker to vote your shares on the matter.

 

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DESCRIBED IN THIS PROXY STATEMENT PURSUANT TO THE COMPENSATION DISCLOSURE RULES OF THE SEC.

 

38