Vistaprint 2013 Annual Report Download - page 128

shares on NASDAQ is at least $75.00, representing a 50% or greater shareholder return above Vistaprint’s
share price before the July 28, 2011 strategy announcement.
‰To emphasize long-term performance, the options vest over seven years. They have an eight-year term.
‰The aggregate value of Mr. Keane’s options granted in May and August 2012 represents the total approx-
imate value of all long-term incentive awards of any kind that Vistaprint would have granted to Mr. Keane
over a four-year period, and our Supervisory Board has passed resolutions that Vistaprint shall not grant
any additional long-term incentive award in any form (including equity or long-term cash awards) to
Mr. Keane until fiscal 2016 at the earliest.
‰The value of the option granted to each of our other executive officers represents the total approximate
value of all traditional share options that Vistaprint would have granted to each executive officer over a
four-year period, and our Supervisory Board has passed resolutions that Vistaprint shall not grant any
additional share options to our current executive officers until fiscal 2016 at the earliest.
Discontinuation of certain pay practices. Some of our major shareholders consider the inclusion of excess
parachute payment tax gross-up provisions in our executive retention agreements with our executives to be a
problematic pay practice. Accordingly, our Compensation Committee decided that, after August 1, 2012, we will
no longer include such tax gross-up provisions in the executive retention agreements that we enter into with our
future executives.
Pay for performance. The total compensation package for our executive officers is weighted heavily
toward compensation based on Vistaprint’s operating and share price performance. For fiscal 2013, our Chief
Executive Officer had 92% of his total compensation at risk through our cash and equity incentive programs,
including an annualized portion of his multi-year, premium-priced share options. Our annual and long-term cash
incentive programs are dependent on Vistaprint’s revenue and earnings per share performance, while our equity
incentive programs are dependent on the performance of our share price. Attainment of the annual and long-term
cash incentives are based on financial goals that the Compensation Committee believes are highly challenging,
but achievable.
Compensation Committee Approach
In determining the compensation of our executive officers, our Compensation Committee takes into account
the analysis and recommendations of the Committee’s independent compensation consultant (currently Towers
Watson), data from the “primary” comparison peer group described below, published compensation survey data,
and detailed tally sheets summarizing our executive officers’ current and historical compensation. The
Compensation Committee generally seeks to pay our executives total compensation (including base salary,
annual cash incentive, and long-term incentive awards) at the 75th percentile of our primary peer group for
extraordinary performance and then applies its own discretion to take into account any other factors it may deem
relevant in any given fiscal year, such as general economic conditions, the internal equity of compensation
among our executives, each executive’s experience and role, and individual performance. The Committee does
not assign specific weights to particular factors but considers them together in determining compensation. The
Committee also reviews forecasts of compensation trends that may be applicable to us in the future using a sec-
ond “aspirational” comparison peer group that assumes annual revenues, industry, growth rates, and market capi-
talizations comparable to Vistaprint in the future if Vistaprint were to achieve its current business objectives.
With Towers Watson’s assistance, our Compensation Committee engages in a rigorous process each year to
develop a “primary” comparison peer group consisting of publicly traded firms that have characteristics that are
currently comparable to Vistaprint or comparable to where Vistaprint expects to be in the near future. Through a
multi-step process, the Committee considers a robust number of companies for inclusion in our peer group,
including the consideration of, among other attributes, each company’s ownership structure, industry groupings
(including Global Industry Classification Standards), annual revenue, and other financial metrics, as well as
comparable companies identified on the Dow Jones and Institutional Shareholder Services lists. For fiscal 2013,
the initial financial criteria for the primary comparison peer group included annual revenue in the range of
$1.1 billion to $3.0 billion, and market capitalization between $1.3 billion and $3.4 billion. The Compensation
Proxy Statement
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