iRobot 2011 Annual Report Download - page 26

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Proxy Statement
Methodologies for Establishing Executive Compensation
The compensation committee, which is comprised entirely of independent directors, reviews the
compensation packages for our named executive officers, including an analysis of all elements of compensation
separately and in the aggregate. In determining the appropriate compensation levels for our chief executive
officer, the compensation committee meets outside the presence of all our executive officers. With respect to the
compensation levels of all other named executive officers, the compensation committee meets outside the
presence of all executive officers except our chief executive officer. Our chief executive officer annually reviews
each of the other named executive officers’ performances with the compensation committee.
With the input of our human resources department and compensation consultant, the chief executive officer
makes recommendations to the compensation committee regarding base salary levels, target incentive awards and
actual payouts, 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.
Moreover, the compensation committee considered the advisory proposal approving named executive
officer compensation that was completed for our 2011 annual meeting of stockholders. Of stockholder votes
received, an overwhelming majority — ninety-seven percent — of our stockholders voted to approve our “say on
pay” proposal. Votes regarding the non-binding, advisory proposal approving compensation of our named
executive officers were as follows:
For 17,608,355 96.89%
Against 353,004 1.94%
Abstain 212,693 1.17%
The compensation committee believes this affirms shareholders’ support of our approach to executive
compensation, and therefore did not significantly change its approach in 2011. The compensation committee will
continue to consider the outcome of our say-on-pay votes, regulatory changes and emerging best practices when
making future compensation decisions for our named executive officers.
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 for companies with revenues, numbers of employees and market
capitalizations similar to our profile.
The compensation committee engaged an independent compensation 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.
The following selection criteria were used to develop the comparative peer group that the compensation
committee and its compensation consultant used in assessing the competitiveness of our executive compensation
for purposes of fiscal 2011 compensation actions:
• Companies with revenues within a similar range (1/4 to 3x)
• Companies with similar market capitalizations
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