Vistaprint 2010 Annual Report Download - page 129

Based on its review, the Compensation Committee determined the base salaries of our named executive
officers as follows:
• Mr. Keane’s base salary for fiscal 2010 increased approximately 5% from fiscal 2009 to align him to
the 25th percentile of our primary peer group. For fiscal 2011, to further reinforce our pay for
performance philosophy, we reallocated Mr. Keane’s compensation to reduce his base salary by 20%
and proportionately increased his annual incentive compensation target, for which the actual compensa-
tion he receives will vary based on our performance with respect to constant currency revenue and
earnings per share goals.
• The base salaries of Ms. Cebula and Ms. Holian for fiscal 2010 increased modestly from fiscal 2009,
by approximately 1%, to maintain their salaries at competitive rates.
• Mr. Giannetto’s base salary for fiscal 2010 increased by approximately 16% from fiscal 2009 to bring
his salary in line with the 40th percentile of our primary peer group.
You can find more information on our named executive officers’ salaries in the Summary Compensation
Table below.
Annual Cash Incentive
The Compensation Committee grants annual cash incentive awards to our named executive officers,
pursuant to annual award agreements under our Performance Incentive Plan for Covered Employees, to
provide an incentive to executives to achieve financial goals that are tied to the current fiscal year, typically
constant currency revenue and earnings per share, or EPS. The Supervisory Board sets revenue and earnings
per share goals annually as part of our comprehensive strategic planning and budgeting process, and the
Compensation Committee believes these goals are highly challenging yet achievable. The Compensation
Committee sets the executive officers’ target annual cash incentive levels based on its analysis of comparative
data of our primary peer group and on our pay-for-performance philosophy. The Compensation Committee
bases the annual cash incentives 50% on Vistaprint’s achievement of full-year constant currency revenue goals
and 50% on Vistaprint’s achievement of full-year EPS goals determined by the Compensation Committee. For
purposes of calculating these annual incentives, the Compensation Committee defines “constant currency
revenue” as consolidated net revenue for Vistaprint and its subsidiaries for the fiscal year, adjusted to use the
same currency exchange rates as set forth in Vistaprint’s budget for the fiscal year. “Earnings per share” is
defined as earnings per share, on a fully diluted basis for the results of Vistaprint’s operations on a
consolidated basis for the fiscal year, calculated in accordance with U.S. generally accepted accounting
principles with some exclusions for income or expenses relating to several specific unusual events.
As set forth in each annual award agreement with our named executive officers, the actual amount paid
for the annual cash incentives for each fiscal year is calculated as follows:
• The annual incentive payout is a percentage of the target award for each executive, listed in the table
below, where the payout percentage equals (0.5 X Revenue Target Percentage
^0.5
+ 0.5 X EPS Target
Percentage
^0.5
)
^19.2
. The Revenue Target Percentage and EPS Target Percentage are calculated by
dividing the actual amounts for the fiscal year by the goals determined by the Supervisory Board and
Compensation Committee.
• If either Vistaprint’s actual constant currency revenue amount or actual EPS amount is less than 90% of
the goal, then the annual payout would be zero even if the other goal is achieved.
• The payout percentage is capped at a maximum of 250%.
Fiscal 2010 annual cash incentives
For fiscal 2010, our achievement of constant currency revenue of $652,800,000 and EPS of $1.494
against our constant currency revenue goal of $640,000,000 and our EPS goal of $1.40-1.46 (calculated using
$1.43 as a target) resulted in an annual cash incentive payout of 135.7% of target levels to our named
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