Vistaprint 2013 Annual Report Download - page 127

EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Executive Overview
Our success depends on our ability to attract and retain top talent in a competitive marketplace, and to moti-
vate that talent to achieve outstanding short- and long-term performance. Accordingly, our Compensation Com-
mittee, which oversees the compensation program of our executive officers, designed an executive compensation
program that is intended to:
‰provide an overall level of compensation that is competitive with the compensation levels of companies of
similar size, complexity, revenue, and growth potential to Vistaprint;
‰reflect the desired caliber, level of experience, and performance of our executive team; and
‰pay commensurate with Vistaprint’s performance, with total compensation weighted heavily toward
performance-based compensation that is tied to operating or stock performance.
Shareholder engagement. At our 2011 annual general meeting of shareholders, our shareholders voted in
favor of our executive compensation program for fiscal 2011 by a slim margin, with 50.4% of votes cast in favor
of the compensation program. By contrast, at our 2012 annual general meeting of shareholders, our executive
compensation program for fiscal 2012 received 97.1% approval from our shareholders. We believe that two
major contributing factors to this dramatic increase in our shareholder approval levels were the collaborative
process in which we reached out to our major shareholders in fiscal 2012 and our decision, based on shareholder
feedback at the 2011 annual general meeting, not to provide excess parachute payment tax gross-up provisions in
future agreements with our executives, as described below. Based on our shareholders’ feedback in the collabo-
rative outreach process and our compensation philosophy, in fiscal 2012 we redesigned the long-term incentive
compensation of our executive officers to emphasize premium-priced share options, as described below. In
August 2013, we conducted a similar collaborative process in which we once again reached out to our major
shareholders to seek input on the proposed changes to our Supervisory Board compensation, as described in
Proposal 9 of this proxy statement, and also to update them on our ongoing executive compensation program,
which has not changed significantly from fiscal 2012.
Redesign of our long-term compensation program. Based on our pay-for-performance compensation phi-
losophy, feedback from the Committee’s independent compensation consultant (Towers Watson), and our share-
holders’ suggestions from the outreach process described above, the Compensation Committee redesigned the
long-term incentive component of our executive compensation program in late fiscal 2012. As a result of this
redesign, we granted to our executive officers multi-year, premium-priced share options designed to increase the
emphasis on Vistaprint’s long-term performance and our five-year growth strategy using share price as the pri-
mary performance metric, and we did not grant any long-term cash incentive awards to our executive officers for
fiscal 2013. The Compensation Committee believes that the premium-priced share options provide strong align-
ment of performance-based compensation with long-term shareholder value creation, significant downside risk
for the executives if Vistaprint performs poorly, and significant upside potential if Vistaprint performs well,
through the following features:
‰The options have an exercise price of $50.00 per share, which was significantly higher than the closing
price of Vistaprint’s ordinary shares on NASDAQ on the grant dates. The Compensation Committee chose
this exercise price in part because it is higher than the highest of the three-, six-, and twelve-month trailing
averages of Vistaprint’s share price on NASDAQ as of the July 28, 2011 public announcement of our
five-year growth strategy. This premium exercise price ensures that Vistaprint’s executives do not realize
returns on these awards until the effectiveness of our five-year strategy is reflected by our share price
being higher than those three-, six-, and twelve-month trailing averages.
‰Robert Keane, our Chief Executive Officer, has an additional share price hurdle before he can realize any
returns from his premium-priced options, which is that, in addition to the vesting schedule described
below, he can exercise his options only on dates when the high price per share of Vistaprint’s ordinary
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