iRobot 2014 Annual Report Download - page 31

Download and view the complete annual report

Please find page 31 of the 2014 iRobot annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 152

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152

25
Long-Term Incentives
Executive officers (and other employees) are eligible to receive restricted stock, stock option grants, restricted stock units
and other stock awards that are intended to promote success by aligning employee financial interests with long-term stockholder
value. Long-term incentives are awarded based on various factors primarily relating to the responsibilities of the individual officer
or employee, his or her past performance, anticipated future contributions, prior grants and Company performance. In general, our
compensation committee bases its decisions to grant long-term incentives on recommendations of our chief executive officer and
the compensation committee's analysis of peer group and industry compensation information, with the intention of keeping the
executives' overall compensation at a competitive level with the comparator companies reviewed by the compensation committee
in the technology and robotics industries. Our compensation committee also takes into consideration the number of shares of
common stock outstanding, the number of shares of common stock authorized for issuance under our equity compensation plans,
the number of options and other equity awards held by the executive officer for whom an award is being considered and other
elements of the officer's compensation, as well as our compensation objectives and policies described above when reviewing the
long-term incentive program.
Consistent with the feedback we received from our stockholders, in 2014, we introduced a significant change to our long-
term incentive program through the introduction of performance-based equity awards. In March 2014, we made the initial equity
grants (stock options and restricted stock unit awards) under this new program, immediately following our 2013 annual
performance review cycle, consistent with the Company's historical annual grant timing.
In March 2014, we granted our first award of performance share units using a mix of 25% stock options, 50% restricted
stock unit and 25% performance share units to our named executive officers. The compensation committee believes a mix in our
long-term equity awards between stock options, restricted stock units and performance share units aligns the incentives of our
executives with the interests of our stockholders and the long-term performance of the Company by directly tying a significant
portion of the value that may be realized from our equity compensation to an increase in our stock price.
Mr. Cerda, who was not an executive officer at the time of the March 2014 equity grants, did not receive PSUs, but he will in
2015.
The compensation committee expects the mix of long-term equity vehicles to evolve, as needed, in coming years to continue
to best align and support our longer-term business strategy.
Proxy Statement