iRobot 2012 Annual Report Download - page 27

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• Where possible, companies with two or more lines of business - i.e. defense and commercial electronics
Due to exclustion of Argon ST, Inc. and ICx Technologies Inc. (both companies were acquired), Esterline Technologies
Corp., Mercury Computer Systems, Inc., and SeaChange International Inc. were added to the 2012 peer group. The resulting
peer group consisted of the following 16 firms:
Accuray Incorporated Mercury Computer Systems Inc.
AeroVironment, Inc. Orbital Sciences Corporation
American Science & Engineering, Inc. Plantronics, Inc.
Audiovox Corp. SeaChange International Inc.
Bruker Corporation Synaptics Incorporated
Cognex Corporation Tivo Inc.
Esterline Technologies Corp. Trimble Navigation Ltd.
Intuitive Surgical Inc. Universal Electronics Inc.
These sixteen companies, at the time of the analysis, had median annual revenues of $503 million and a median market
capitalization of $923 million, compared to our 2012 annual revenue of $436 million and year-end market capitalization of
$516 million.
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 2012, the compensation committee considered many factors in addition
to the 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 compensation levels of each individual and of the named executive officers as a group,
• relative levels of pay among the executive officers,
• the amount of each component of compensation in the context of the executive officer's total compensation and other
benefits,
• for each named executive officer, other than the chief executive officer, the evaluations and recommendations of the
chief executive officer, and
• the competitiveness of the compensation packages relative to the selected benchmarks as highlighted by the
independent compensation consultant's analysis.
The compensation committee determines compensation for our chief executive officer using the same factors it uses for
other executive officers, while placing greater emphasis on performance-based opportunities through long-term equity and
short term cash incentive compensation, which we believe better aligns our chief executive officer's interests with our success
and the interests of our stockholders. In assessing the compensation paid to our chief executive officer, the compensation
committee relies on both information from our selected benchmarks and its judgment with respect to the factors described
above.
Elements of Compensation
Our executive compensation program consists of three primary elements: salary, long-term equity interest, primarily in
the form of stock options and restricted stock units, and an annual cash incentive program based on both corporate and, if
appropriate, divisional performance. All of our executive officers also are eligible for certain benefits offered to employees
Proxy Statement