LeapFrog 2013 Annual Report Download - page 131
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Please find page 131 of the 2013 LeapFrog 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.Key Compensation-Related Corporate Governance Practices
The compensation committee evaluates our executive compensation program on an ongoing basis to
ensure that it is consistent with the Company’s short-term and long-term goals given the dynamic nature of
our business and the market in which we compete for executive talent. Working together with the full board
of directors and our nominating and corporate governance committee, we maintain the following key
compensation-related governance practices:
•Independent Compensation Committee. The compensation committee is comprised solely of
independent directors.
•Independent Compensation Committee Advisor. The compensation committee engaged its own
compensation consultant to assist with its 2013 compensation reviews. This compensation consultant
performed no consulting or other services for the Company.
•Annual Executive Compensation Review. The compensation committee conducts an annual review
and approval of our compensation strategy, including a review of our compensation peer group used
for comparative purposes and a review of our compensation-related risk profile to ensure that our
compensation-related risks are not reasonably likely to have a material adverse effect on the
Company.
•Hedging Prohibited. During 2013, we implemented a policy prohibiting all of our employees,
including our named executive officers, from hedging any Company securities.
Key Executive Compensation Policies and Practices
Our compensation philosophy and related corporate governance policies and practices are complemented
by several specific compensation practices that are designed to align our executive compensation program with
long-term stockholder interests, including the following:
•Pay-for-performance alignment: We believe in maintaining a strong pay-for-performance relationship
for our named executive officers. In 2013, the Company’s performance fell below expectations and,
as a result, the compensation of our chief executive officer, as reported in the Summary
Compensation Table below, decreased 21% from 2012. The majority of the target direct
compensation opportunities for all of our named executive officers is performance-based (includes
performance based bonuses and stock option compensation).
•Compensation At-Risk. Our executive compensation program is designed so that a significant portion
of the compensation of our named executive officers is ‘‘at risk’’ based on corporate performance, as
well as equity-based, to align the interests of our executive officers and stockholders. In 2013, 80%
of the average target direct compensation opportunities for our named executive officers (base salary
+ target annual bonus + equity award + other compensation) was at-risk (target annual bonus +
equity award).
•No Retirement Plans. We do not currently offer, nor do we have plans to provide, pension
arrangements, retirement plans or nonqualified deferred compensation plans or arrangements to our
executive officers.
•No Perquisites. We do not provide any perquisites or other personal benefits to our executive
officers.
•No Tax Reimbursements. We do not provide any tax reimbursement payments (including
‘‘gross-ups’’) on any perquisites or other personal benefits, other than relocation benefits.
•No Special Health or Welfare Benefits. Our executive officers participate in broad-based
company-sponsored health and welfare benefits programs on the same basis as our other full-time,
salaried employees in the countries in which they are employed.
•No Post-Employment Tax Reimbursements. We do not provide any tax reimbursement payments
(including ‘‘gross-ups’’) on any severance or change-in-control payments or benefits.
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