Logitech 2012 Annual Report Download - page 137

DETERMINING TOTAL EXECUTIVE COMPENSATION
Role of the Compensation Committee
The Compensation Committee reviews and approves our compensation programs, including the specific
compensation of our Chairman, our Chief Executive Officer, and our other executive officers.
Under the Compensation Committee’s charter, the Committee has the authority to engage its own advisors
(including compensation consultants) to assist it in carrying out its responsibilities. In February 2011 the Committee
retained Radford, an AON/Hewitt company, to provide analysis, advice and guidance with respect to executive
compensation. On the request of the Committee, Radford developed specific executive compensation analyses and
recommendations for Logitech’s Chairman, CEO, and executive officers for fiscal year 2012. In fiscal year 2012, at
the request of the Compensation Committee, Radford provided advice and recommendations to the committee on
competitiveness of executive officer compensation levels, revisions and additions to the Company’s compensation
peer group, goal metrics and bonus design, compensation mix between cash and equity, employment contract
provisions, executive severance packages, executive officer hiring packages, developments in high technology
compensation programs, trends in executive compensation for the Silicon Valley and Europe, legislation and
regulations affecting executive compensation, and the impact of the global economy on executive compensation
and director compensation. Logitech paid fees of less than $ 100,000 to various divisions and subsidiaries of
AON Corporation for services not related to executive compensation consulting services. The majority of these
additional services consisted of activities Radford or AON/Hewitt have provided to Logitech for several years, and
include the purchase of Radford’s industry compensation surveys, the accounting valuations of equity grants, and
the calculation of PSU grant performance.
Role of Executive Officers in Compensation Decisions
While the Compensation Committee sets the compensation of our CEO and other executive officers
with assistance from the independent compensation consultant, the Committee looks to management to make
recommendations to the Committee with respect to both design of compensation programs and specific compensation
decisions. We expect that the Compensation Committee will continue to solicit input from our Chairman and CEO
with respect to compensation decisions affecting executive officers. The Compensation Committee deliberates and
makes decisions on the executive officers’ compensation without the presence of the Chairman or CEO.
The fiscal year 2012 executive officer compensation proposals for base salary, bonus targets and equity
grant values were developed by Radford and presented to both the Compensation Committee and Logitech’s
management. Based on the analysis performed by Radford, Logitech’s Vice President of Worldwide Human
Resources and its compensation department, in consultation with Guerrino De Luca, Logitech’s Chairman, and
Gerald Quindlen, Logitech’s former President and Chief Executive Officer, (other than with respect to their own
proposed compensation) provided specific recommendations to the Compensation Committee.
As part of the annual personnel review and succession planning process, Mr. Quindlen also provided
the Board and the Compensation Committee with his perspective on the performance of Logitech’s executive
officers, and Mr. De Luca provided the Board with his perspective on the performance of Mr. Quindlen. This
performance feedback provided additional input to the Committee when making its decisions on fiscal year
2012 compensation.
Once the Compensation Committee received the analysis and recommendations from both Radford and
Logitech’s management, who were in agreement on the recommended actions, the Committee made all decisions
regarding executive officer fiscal year 2012 compensation without Mr. De Luca, Mr. Quindlen or any executive
officer present. The Committee considered, but was not in any way bound by, the recommendations made
by management.
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