Logitech 2014 Annual Report Download - page 110

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 in the United States and Switzerland, 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. During fiscal year 2013, the SEC issued rules under the Dodd-Frank Act concerning compensation
consultant independence. Under these rules the Compensation Committee must determine whether any work
completed by a compensation consultant raised any conflict of interest after taking into account six independence-
related factors. The Compensation Committee has reviewed these six factors as they apply to Radford and has
concluded there is no conflict of interest.
Role of Management in Compensation Decisions
Management makes recommendations to the Compensation Committee with respect to both the design of
compensation programs and specific compensation decisions. The Committee reviews the recommendations with
its independent compensation consultant, deliberates and approves the executive officers’ compensation. The
Committee does so independently without the presence of an executive officer during deliberations or decision
making on his or her compensation.
The fiscal year 2014 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 then-Vice President of Worldwide Human Resources and
its compensation department, in consultation with Guerrino De Luca, Logitech’s Chairman, and Bracken Darrell,
Logitech’s Chief Executive Officer, provided specific recommendations to the Compensation Committee.
As part of the annual personnel review and succession planning process, Mr. Darrell also provided the Board
and the Compensation Committee with his perspective on the performance of Logitech’s executive officers. This
performance feedback provided additional input to the Committee when making its decisions on fiscal year 2014
compensation.
Overview of Factors Considered by Committee
The Compensation Committee considers a variety of factors when determining total executive
compensation, including:
• Competitive considerations.
• Subjective elements, such as the scope of the executive’s role, experience and skills and the individual’s
performance during the prior fiscal year and potential for future contribution to Logitech.
• The performance of Logitech in the prior fiscal year.
• The performance of Logitech in the prior fiscal year relative to the Company’s compensation peer group
and the overall technology industry.
• Accrued and realized gains from past equity incentive awards.
• The need to retain key executives during Logitech’s challenging turnaround period.
Competitive considerations
Both peer group and broader industry compensation survey data is used by our Compensation Committee
when setting Logitech’s executive compensation, as well as to assist the Compensation Committee in the evaluation
of the design of bonus plan and equity compensation programs.
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