Outgoing Pier 1 Imports boss gets big exit package

Pier 1 Imports CEO Alex Smith, who has said he will leave the Fort Worth-based retailer at year’s end, will receive a $2.5 million severance payment, the company disclosed in a regulatory filing Wednesday.

Smith, 64, is also scheduled to receive a lump-sum pension payout of about $24 million during fiscal 2018, according to the filing with the Securities and Exchange Commission, which cites the termination agreement.

Last month, Pier 1 said that its board of directors and Smith mutually agreed on a transition plan by which Smith would step down as president and CEO of the home furnishings company and leave the board. The company said it would begin to search for a new CEO.

Smith, who joined Pier 1 in 2007, led a turnaround that revamped the retailer’s merchandise assortment and relaunched its e-commerce site. But sales have stagnated in recent years and profits have been squeezed. Last week, the company reported a second-quarter loss of $4.1 million as net sales decreased by 6.7 percent. In its last fiscal year, profits declined nearly 50 percent and sales increased less than 1 percent.

In fiscal 2016, Smith received compensation of $1.25 million plus stock awards worth $2,079,900, according to the company’s proxy statement.

The board is facing pressure from an activist investor. The New York hedge fund Alden Global Capital revealed that it had acquired a 9.5 percent stake in the firm and engaged the board in discussions about its next CEO and shareholder representation on the board.

In response, Pier 1’s board adopted a “poison pill” shareholder rights plan, which would allow existing shareholders to buy more shares if the stake exceeds 10 percent, making a takeover more expensive.

Staff writer Andrea Ahles contributed to this report.

This story was originally published October 5, 2016 at 4:35 PM with the headline "Outgoing Pier 1 Imports boss gets big exit package."