LeapFrog 2011 Annual Report Download - page 143

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EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
Overview
In this Compensation Discussion and Analysis, or CD&A, we describe the key principles and approaches
used to determine elements of compensation paid to, awarded to and earned by our named executive officers.
For purposes of this proxy statement, our ‘‘named executive officers’’ are the two executives who served as
our Chief Executive Officer (CEO) during 2011, our Chief Financial Officer (CFO), two other executive
officers who were serving as executive officers at the end of 2011 and one former executive officer who would
have been one of our three other most highly compensated executive officers had he been serving as executive
officers at the end of 2011, all as reflected in our Summary Compensation Table below. Accordingly, this
CD&A describes our executive compensation program and the compensation policies and decisions that we
made in 2011 for:
• John Barbour, our CEO (as of March 2011);
• William B. Chiasson, currently the Chairman of the Board (formerly our CEO through March 2011);
• Mark Etnyre, our CFO;
• Michael J. Dodd, our President and Chief Operating Officer;
• William K. Campbell, our President, Americas Sales; and
• Michael Y. Chai, our former Executive Vice President, Product Development and Engineering
(Mr. Chai’s employment with the Company terminated in March 2011).
Executive Compensation Philosophy
Our philosophy is to provide total compensation to our named executive officers that reasonably,
equitably and responsibly meets the following objectives:
• Motivates our executives to achieve or exceed established individual goals, which, in turn, result in
meeting or exceeding established company operating targets;
• Aligns the current contributions of our executives with the long term interests of our stockholders;
• Ensures an adequate portion of executive total compensation is based on the achievement of overall
Company performance targets, as well as short-term and long term individual goals;
• Provides reasonable, equitable and responsible bonus opportunities that will maintain individual
executive compensation at established competitive market levels; and
• Avoids incenting excessive risk taking.
We implement this philosophy through the following key principles:
• Provide a balanced mix of cash and equity-based compensation that we believe is suitable to
motivate our executives to achieve our financial and strategic goals while aligning their short-term
and long-term interests with the interests of our stockholders;
• Ensure that a significant portion of each executive’s total compensation is ‘‘at risk,’’ subject
primarily to our overall performance and secondarily to his or her achievement of short-term and
long-term individual goals;
• Pay base salaries that are competitive with the salaries in effect at companies with which we
compete for talent;
• Provide annual bonus opportunities that motivate our executives to achieve or exceed
established operating goals and generate rewards that maintain their total compensation at
competitive market levels;
• Provide equity-based incentive compensation that motivates our executives over the long term to
respond to our business opportunities and challenges as stakeholders in our company;
37