LeapFrog 2013 Annual Report Download - page 132
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Please find page 132 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.•Multi-Year Vesting Requirements. The equity awards granted to our executive officers vest over
multi-year periods, consistent with current market practice and our retention objectives.
Prior Say-on-Pay Vote
At the time of our initial say-on-pay vote at our 2011 annual meeting of stockholders, three years was
selected as the preferred frequency of future say-on-pay votes by over 90% of the votes cast. Accordingly, our
board of directors did not hold an advisory vote on the compensation of our named executive officers in either
2012 or 2013. Consistent with the recommendation of the stockholders, our board of directors is holding a
say-on-pay vote this year. Pursuant to SEC regulations, our board of directors currently plans to hold its next
say-on-frequency of say-on-pay at the 2017 annual meeting of stockholders.
At our 2011 Annual Meeting of Stockholders, our stockholders had the opportunity to provide an
advisory vote on the compensation of our named executive officers, or a ‘‘say-on-pay’’ vote. Over 99% of the
votes cast by our stockholders approved the compensation of our named executive officers, as disclosed in our
2011 proxy statement. Our board of directors and compensation committee reviewed these vote results and
determined that such results affirmed stockholder support of our overall approach to executive compensation
and thus we have not made any changes to our executive compensation program or related policies directly in
response to the vote results.
Executive Compensation Philosophy
Our philosophy is to provide total compensation to our executive officers, including our named executive
officers, that reasonably, equitably and responsibly meets the following objectives:
• Motivates our executive officers to achieve or exceed established individual goals that should result
in meeting or exceeding established Company operating targets and guidance provided to our
analysts and stockholders;
• Aligns the current contributions of our executive officers with the long-term interests of our
stockholders;
• Ensures an adequate portion of our executive officers’ 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 levels for an agreed-upon peer group; 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 executive officers 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 officer’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 executive officers 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 executive officers over the long term
to respond to our business opportunities and challenges as stakeholders in our Company;
• Maintain unvested equity value as a percentage of base salary at a sufficient level to provide a
significant retention motivation;
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