LeapFrog 2008 Annual Report Download - page 130

COMPENSATION COMMITTEE
The compensation committee reviews and approves the overall compensation strategy and policies for
LeapFrog. The compensation committee reviews and approves corporate performance goals and objectives relevant
to the compensation of LeapFrog’s executive officers and other senior management; reviews and recommends to
the board for approval the compensation and other terms of employment of LeapFrog’s CEO; administers
LeapFrog’s equity incentive and purchase plans, stock bonus plans and other similar programs; and reviews and
recommends that the Compensation Discussion and Analysis section be included in this proxy statement. The
compensation committee may form and delegate authority to subcommittees, as appropriate. Under this delegation
authority, the compensation committee has formed a non-executive officer stock award committee, currently made
up of LeapFrog’s CEO, that may grant stock awards to employees who are not executive officers (as that term is
defined in Section 16 of the 1934 Act and Rule 16a-1 under Section 16 of the act) of LeapFrog, provided that this
committee is authorized to grant only stock awards that meet the annual stock award grant guidelines approved by
the compensation committee, which sets forth the number of shares that may be granted to persons based on level
and the total number of shares that may be granted in any given year.
Our policy is that we will not time or select the grant dates for any stock options or stock-based awards in
coordination with the release by us of material non-public information, nor will we have any program, plan or
practice to do so. In addition, we have specific written policies regarding the selection of grant dates for stock
options and stock-based awards made to our executive officers and employees. See the section entitled
“Compensation Discussion and Analysis—Elements of Executive Compensation—Stock Award Grant Date
Policy” in this proxy statement for information relating to this policy.
The compensation committee reviews and considers evaluations and recommendations from the Chief
Executive Officer submitted to the compensation committee with respect to the compensation of other executive
officers. The Chief Executive Officer is not present during any deliberations or decisions concerning his
compensation.
The compensation committee is authorized under its charter to obtain, at the expense of the company, advice
and assistance from internal and external legal, accounting or other advisors and consultants that the
compensation committee considers necessary or appropriate in the performance of its duties. During the past
fiscal year, the compensation committee engaged Towers Perrin and, subsequently, Compensia Inc., as its
compensation consultants. The compensation committee requested that the compensation consultants evaluate
LeapFrog’s compensation practices and assist in developing and implementing the executive compensation
program and philosophy. Towers Perrin developed a competitive peer group and performed analyses of
competitive performance and compensation levels. The competitive peer group was re-analyzed by Compensia
for the July 2008 meeting of the compensation committee and modifications recommended. The compensation
consultants also met individually with members of the compensation committee and senior management to learn
more about LeapFrog’s business operations and strategy, key performance metrics and target goals and the labor
markets in which we compete. Towers Perrin developed recommendations that were reviewed and approved by
the compensation committee for 2008, and Compensia’s recommended modifications to the peer group in
preparation for 2009 were reviewed and ultimately approved in October 2008. The specific tasks and
responsibilities in implementing the directive of the compensation committee are described in greater detail in
the Compensation Discussion and Analysis section of this proxy statement.
The compensation committee is currently composed of four directors, Dr. Nagel (Chairman) and Messrs.
Maron, Simon and Wang. Mr. Maron was appointed to the committee by the board of directors in May 2008.
Messrs. Simon and Wang were appointed to the committee by the board in March 2009. The board has determined
that all members of LeapFrog’s compensation committee are independent (as independence is defined in the NYSE
listing standards), except, as permitted by NYSE listing standards for “controlled companies,” for Mr. Simon,
President of Lawrence Investments. The compensation committee met seven times during our 2008 fiscal year. The
compensation committee has adopted a written compensation committee charter that is posted on our website at
www.leapfrog.com under About Us—Investor Relations—Corporate Governance.
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