LeapFrog 2015 Annual Report Download - page 154

Executive Compensation Philosophy
Our philosophy is to provide total compensation to our executive officers, including our named executive
officers, which reasonably, equitably and responsibly meets the following objectives:
• Aligns the current contributions of our executive officers with the long-term interests of our
stockholders;
• Motivates our executive officers to achieve or exceed targets established in our operating plan;
• 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;
• Target the key elements of executive compensation (base salary, annual bonus opportunity and
equity incentive awards) to provide total compensation packages for our executive officers
individually and as a group at approximately the 50
th
percentile of our direct peers (as identified
below);
• Provide flexibility such that target compensation for individual executive officers may vary above or
below the median based on a variety of factors, such as the executive officer’s skill set relative to
his or her peers, experience and time in his or her position, the importance of the executive officer’s
role to our Company, the difficulty of replacement, the executive officer’s performance and internal
pay equity considerations; and
• Ensure our compensation plans and arrangements avoid incentives that might lead to excessive
risk-taking.
Executive Compensation Considerations
Role of Compensation Committee and Management
Our compensation committee is responsible for the design, implementation, and oversight of our
executive compensation program. Generally, our Chief Executive Officer makes recommendations to the
compensation committee regarding the short-term and long-term compensation for our executive officers,
including our named executive officers (other than with respect to his own compensation). These
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