iRobot 2010 Annual Report Download - page 24

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presence of all executive officers except our chief executive officer. Our chief executive officer annually
reviews each other named executive officer’s performance with the compensation committee.
With the input of our human resources department and compensation consultants, the chief executive
officer makes recommendations to the compensation committee regarding base salary levels, target incentive
awards, performance goals for incentive compensation and equity awards for named executive officers, other
than Mr. Angle. In conjunction with the annual performance review of each named executive officer in January
of each year, the compensation committee carefully considers the recommendations of the chief executive
officer when setting base salary, bonus payments under the prior year’s incentive compensation plan, target
amounts and performance goals for the current year’s incentive compensation plan, and any other special
adjustments or bonuses. In addition, the compensation committee similarly determines equity incentive awards,
if any, for each named executive officer.
Our compensation plans are developed, in part, by utilizing publicly available compensation data and
subscription compensation survey data for national and regional companies in the technology, defense,
household durables and robotics industries. We believe that the practices of this group of companies provide
us with appropriate compensation benchmarks, because these companies have similar organizational structures
and tend to compete with us to attract executives and other employees. For benchmarking executive
compensation, we typically review the compensation data we have collected from the complete group of
companies, as well as a subset of the data from companies with revenues, numbers of employees and market
capitalizations similar to our profile.
With respect to 2010 base salary, cash incentive compensation, and long-term incentives, we reviewed
companies with similar-sized revenues of greater than $228 million and less than $1.1 billion and market
capitalizations of between $146 million to $11.6 billion, in particular: Accuray Inc., Aerovironment, Inc.,
American Science & Engineering, Argon ST, Inc., Audiovox Corp., Bruker Corp., Cognex Corp., ICx
Technologies, Inc., Intuitive Surgical, Inc., Orbital Sciences Corp, Plantronics, Inc., Synaptics, Inc., Tivo, Inc.,
Trimble Navigiation Ltd., and Universal Electronics Inc. These fifteen companies, at the time of the analysis,
had an average annual revenues of $366 million and an average market capitalization of $702 million.
The compensation committee engaged a consultant, Pearl Meyer & Partners, LLC, to help evaluate peer
companies for cash compensation and long-term incentive purposes, analyze applicable compensation data and
determine appropriate compensation levels for our executive officers. Neither the compensation committee nor
the Company has retained Pearl Meyer & Partners, LLC for any other purpose.
We will annually reassess the relevance of our peer group and make changes when judged appropriate.
We believe that the use of benchmarking is an important factor in remaining competitive with our peers and
furthering our objective of attracting, motivating and retaining highly qualified personnel.
The compensation committee reviews all components of compensation for named executive officers. In
accordance with its charter, the compensation committee also, among other responsibilities, administers our
incentive compensation plan, and reviews and makes recommendations to management on company-wide
compensation programs and practices. In setting compensation levels for our executive officers in fiscal 2010,
the compensation committee considered many factors in addition to benchmarking described above, including,
but not limited to:
• the scope and strategic impact of the executive officer’s responsibilities,
• our past business and segment performance and future expectations,
• our long-term goals and strategies,
• the performance and experience of each individual,
• past salary levels of each individual and of the named executive officers as a group,
• relative levels of pay among the executive officers,
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